Reuters reports that lawmakers approved the bill in principle today, enabling it to advance to a vote in the Mexican Senate’s lower house. Sources told Reuters that it’s expected to be voted into law on December 15 as an overarching legislation to enable the regulation of fintech providers.
Secondary laws will then be introduced to set out the precise details of the regulations. Exactly what will be covered remains to be decided, with the initial measure designed to provide a base from which to start building fintech laws.
Assuming the bills get passed, Mexico will join a short list of countries – including the U.S. and U.K. – that have moved towards the regulation of fintech providers.
The industry’s off to a flying start in Mexico. Providers are approaching the country and its neighbours as ideal testing grounds for their services. Around 50 percent of the country’s population of 120 million does not have a bank account. This makes the citizens prime customers of new online-only financial products that can be managed and accessed through a smartphone.
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With fintech providers flocking to the country, Mexico’s government is concerned about the wider financial implications. As fintech’s still largely unproven, a lot of unknowns remain around the startups and their products.
There are fears that widespread fintech use could destabilise the economy by making it difficult for central banks to retain control. Cryptocurrencies could also mask money laundering schemes and other criminal operations.
Opening up to outsiders
The decision to regulate fintech has been received positively by industry members operating in Mexico. Felipe Vallejo, director of public and regulatory policy at the cryptocurrency exchange Bitso, told Reuters it helps Mexico align with other countries. Vallejo described the news as a “victory for the sector,” noting it could make Mexico more attractive to outside fintech investors.
There’s no firm indications yet of what the bill will target or how regulation will be enforced. It’s said to focus on improving transparency and lowering transaction costs, helping to improve competition in the industry. This will develop fintech in Mexico and allow it to evolve into a stable financial ecosystem.