Interview with Jersain Llamas: The FinTech Law in Mexico

Jersain Llamas is a friend and colleague that I had the pleasure to meet this year. He is a researcher dedicated to the study of new technologies and law. He has co-authored the Internet books, weapon or tool? (2018) and Technological Democracy (2019). Currently, he leads the chapter of Legal Hackers Guadalajara, having also founded it.

On this occasion, given that Jersain is one of the most knowledgeable lawyers on regulation applicable to FinTech in Mexico, I interviewed him about the latest advances in relation to the FinTech Law, the deadline to request authorization licenses before the CNBV and the use of technology blockchain in the Mexican voting system.

The Mexican cryptocurrency sector is at a key moment. The September 25 expires the deadline for exchanges to request an authorization license before the National Banking and Securities Commission (CNBV). What do you think happens after that date?

The ITFs will have to issue regulatory reports that will start from the 01 of January of the 2020, which must be submitted with certain periodicity and established deadlines, but that at roughly They are a minimum catalog, bank and other agency loans, reclassifications, financial statements, commission agent information, claims, etc.

In the case of Vexbit and Volabit how they pronounced on their website, their willingness to change pesos portfolios at stablecoin USDC is transitory, stressing that they will be working to bring back a portfolio in pesos attached to the regulation. The truth is that there are still transients to be fulfilled and positions to be addressed.

In turn, the SAT announced that since the September 09 (September 10 legal date), the exchange of virtual assets will be considered a vulnerable activity according to Article 17 of the Federal Law for the Prevention and Identification of Operations with Source Resources Illegal. With the obligation that entities that carry out this type of activity will have the obligation to join the list of vulnerable activities through the Money Laundering Prevention Portal. Identify customers or users who use their platform or service, and if necessary request information from the beneficiary owner. Send notice to the authority when operations are carried out for an amount equal to or greater than the equivalent of $ 54,496.05 pesos m / n equivalent to 645 UMA (Unit of Measurement and Update). As well as keeping your data updated in the list of vulnerable activities.

One of the largest exchanges in Latin America such as Bitso has recently obtained a license to operate in Gibraltar (Europe). Do you think this is the way that other Mexican exchanges should follow? What are the benefits of obtaining a license from the CNBV?

The primary and specifically secondary provisions (circular 4 / 2019 of the 08 / 03 / 2019) are accurate in saying that "it is considered convenient to maintain a healthy distance between virtual assets and the financial system." So looking for solutions abroad to continue operating is a feasible option.

Regarding changes in the operation of exchange houses. As Tomás Álvarez, Director of Volabit, said at the time, to Criptonoticias and that in my opinion is a great precursor of the Fintech ecosystem:

As a first option, exchange houses can be regulated as ITF to continue maintaining their portfolios in pesos, and additionally transfer their operations in cryptocurrencies to another non-regulated entity in Mexico. As a second option, companies can eliminate the wallet functionality in pesos and not be regulated as ITF in order to maintain their operations in cryptocurrencies. (…)

Some exchange houses such as Bitso are adjusting to the first option, while others such as Volabit and Vexbit are adjusting to the second. He added that users of these platforms should not worry, because these changes only affect the way in which companies that trade with cryptocurrencies operate and have no consequences on users.

Recently, a legislative initiative proposes the use of technology blockchain for voting Do you think the Mexican voting system is ready to implement the technology blockchain?

Currently, the central and backbone of legitimacy is technology, since it has helped to overcome problems in society, streamline services and give certainty about issues that can be corrupted humanly. Disruptive technologies and crypto advancement make information and automated systems more secure and transparent every day, creating reliable, comprehensive and available information.

It is necessary a priori, to carry out an exhaustive study with a group that covers many approaches to be able to implement Blockchain technology. While formally the electronic vote has just emerged (without blockchain), this is a step to carry an implementation.

In Latin America, Mexico is at the forefront of technology adoption blockchain . What do you consider some of the reasons that led to it? Do you consider that the FinTech Law has allowed further development of this sector in Mexico or, on the contrary, has slowed it down? Do you recommend other Latin American countries to enact a FinTech Law?

The legislator's vision is regular because of promoting and making rights and obligations binding. That there are fintech laws allows dialogue and debate, however in the current scenario we observe that a fintech naturally emerges to compete with financial technology against large companies, but de facto, the price of legal advice, tariffs and infrastructure leads to only projects With strong capital, experience and advice they become fintech or other figures that regulate the legislation.

There is the FinTech Law, do you think it's time to think about a Blockchain Law? Do you think it would be a possibility that this law will be enacted in the future?

The fintech law has a reason, regulates financial technology institutions. Legislation per se of a technology is not feasible since it could be anachronistic, since the protected legal good must be safeguarded and not the technique or technology used. Possibly an Official Mexican Standard as a more technical document auxiliary to special legislation could be more viable, however, the technology blockchain It must go as a guarantee tool to fulfill rights and obligations.

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Adolfo Morán
Adolfo is Founder and Executive Director of Lawgic Tec, a non-profit association dedicated to research on law and new technologies. Lawyer from the Pontifical Catholic University of Peru (PUCP); Senior Legal Consultant at EY Law, specialized in Financial Law, FinTech, Financial Consumer Protection, Smart Contracts, Blockchain and Crowdfunding. Researcher accredited by the PUCP. Co-organizer of the Ethereum community from Lima, Peru. Email:


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