On September 19, Reuters reported that Mexican officials had announced the formulation of a bill to regulate the growing Financial Technology (FinTech) sector in the country. The proposed bill will allow government bodies to balance risks and create competition in a new and growing market. Although an independent commission has yet to be formed, reports state that the central bank will be in charge of overseeing the project.
The Mexican President, Enrique Pena Nieto, also confirmed that the proposed legislation would be announced in the Senate on September 20. For Pena Nieto, the greatest concern is to protect his country from the “financing of extremists” as well as ensuring “financial stability.” The president’s report has been welcomed by companies focused on crowdfunding as well as payment firms. Luis Ruben Chavez, the founder of Mexican crowdfunding firm Yotepresto, was quoted as saying:
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“The regulation is good news for all companies in this sector because… growth will be greater with clear rules.”
Stimulating a Massive Market Potential
Though the beginning of the Mexican tech wave began in 2012, it shows no signs of slowing down. Ruben Chavez also states that Mexico, “went from less than 50 (companies) in 2015 to 158 in 2016, and we already have over 240 this year.” The introduction of the proposed bill should only help to promote this growth.
A steady stream of silicon valley tech companies are also moving into a relatively untapped market, complete with scalable business models, and transformational technologies. The move of P2P gurus (Gerardo Obregon), legal experts (Marc Segura), and members from PayClip (Adolfo Babatz) and Kueski (Adalberto Flores), all point towards a much brighter future for FinTech in Mexico.
Much has also to be said for the massive number of Mexican citizens without access to a financial institution. Reuter’s pointed out that the proposed bill will positively affect, “the more than 50 percent of Mexico’s roughly 120 million citizens without bank accounts.”
This proposal also places Mexico in a regulatory limbo along with a growing number of other forward-leaning countries. To name a few, the United Arab Emirates, the United Kingdom, Singapore, Holland, Malaysia, Australia, Canada and Hong Kong are all looking for respective solutions to this growing economy.
Although each country will have to determine its own regulations, President Pena Nieto’s announcement reveals his country’s intentions to provide clear rules for fintech and bitcoin-related companies.