Has Mexico Passed a Good Law for the Fintech Sector?

Mexico has enacted a useful fintech law that represents the first of its kind for Latin America, Lindsay Lehr writes below. // File Photo: Mikemx via Creative Commons.

Mexican President Enrique Peña Nieto this month signed into law a new measure to regulate the country’s financial technology sector. The new law seeks to establish stability and prevent money laundering across a host of emerging technologies in the financial services sector such as crowdfunding, cryptocurrencies and new payment methods. The law also permits open banking, or the sharing of user information by financial institutions through public application programming interfaces, or APIs. How important are is Mexico’s new fintech measures, and will they benefit the country? What were the biggest areas of debate and controversy as the legislation was being drafted over past months? Which interests stand to gain or lose the most from its passage?

Richard Fogarty and Tony Moroney, managing directors at Berkeley Research Group: “Mexico is one of the largest consumer markets in the world, with an emerging middle class, rapid growth in Internet usage and mobile phone penetration. These measures are positive and are to be welcomed as the traditional boundaries between financial service providers continue to blur. They will also underpin and support further growth in Mexico’s already thriving fintech sector; in excess of 150 firms are operating across areas including payments, remittances, lending and crowdfunding. By providing regulatory certainty to industry participants, Mexico will generate additional investment in fintech and the digital transformation of financial services. Regulatory authorities around the world are attempting to balance pro-consumer innovation with the need to maintain stability of the financial system. The traditional descriptors of firms are somewhat unhelpful as…”

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