Stablecoins in Mexico: The Urgent Need for Regulation Amid the Boom in Cross-Border Payments

FINTECH / by Javier Pérez Moreno

In recent years, Mexico’s crypto asset ecosystem has evolved rapidly. One of the most notable developments has been the adoption of stablecoins, particularly those pegged to the U.S. dollar, such as USDT and USDC, which are widely used in remittance transactions, international payments, and e-commerce. However, this growth has taken place amid a concerning regulatory vacuum.

Stablecoins: Between Stability and Efficiency

Unlike volatile cryptocurrencies such as Bitcoin or Ether, stablecoins are designed to maintain parity with an underlying asset, typically a fiat currency. This feature has allowed them to establish themselves as attractive instruments for transferring value quickly, seamlessly, and without the need for traditional banking intermediaries.

In Mexico, their use has increased among remittance platforms, freelancers who receive payments from abroad, small businesses that import digital services, and users seeking a safe haven from exchange rate volatility. However, current regulations do not specifically address their nature or the associated risks.

A legal framework that falls short

The Law Regulating Financial Technology Institutions (“Fintech Law”), published in the Official Gazette of the Federation on March 9, 2018, regulates the use of “virtual assets” by financial technology institutions (“FTIs”). However, this law does not distinguish between types of assets nor does it provide specific definitions for stablecoins. The Bank of Mexico (“Banxico”), through Circular 4/2019, restricted the use of virtual assets by financial institutions, establishing that their use must be authorized in advance and is limited exclusively to internal operations, without providing for an expedited procedure for obtaining such authorization. 

In light of the above, it is important to note that in June 2021, Banxico, the Ministry of Finance and Public Credit (“SHCP”), and the National Banking and Securities Commission (“CNBV”) issued Joint Communiqué No. 039/2021, which reiterates that financial institutions in Mexico are not authorized to offer transactions involving virtual assets to the public, including those designed to maintain a stable value (i.e., stablecoins). This communiqué reinforces the absence of a specific regulatory framework for stablecoins and highlights the urgent need to develop legal mechanisms that allow for distinguishing between the different types of cryptoassets and their uses. Furthermore, there is no clarity regarding the requirements that issuers or custodians of stablecoins must meet to operate legally in Mexico, nor regarding their classification as a financial instrument, digital asset, or foreign currency.

Nor is there clarity regarding the requirements that stablecoin issuers or custodians must meet to operate legally in Mexico, or regarding their classification as a financial instrument, digital asset, or foreign currency.

For its part, the SHCP, through the CNBV, has maintained a focus on preventing money laundering in the financial sector, in accordance with the General Provisions on AML/CFT, requiring specific controls for transactions involving virtual assets carried out by regulated entities. However, there is no specific regulatory framework for platforms that operate with stablecoins as a means of payment or reserve and that are not part of the financial system; such activities are considered vulnerable and are subject to the regime established under the Federal Law for the Prevention and Identification of Transactions with Illicit Funds.

Actual risks vs. perceived risks

The lack of regulation creates risks that must be addressed, such as the potential loss of parity with the underlying asset, the insolvency of unregulated issuers, or misuse for illicit purposes. However, it is also important to avoid overregulation based on perceived or speculative risks that could stifle innovation.

Drawing on our experience at bgbg, we have advised various platforms that use stablecoins as part of their business models for cross-border payments, custody solutions, or loyalty programs, always ensuring compliance with AML/CFT regulations, best practices, efficient corporate structuring, and related tax analysis.

Appropriate regulation should be guided by a risk-based approach, allowing for greater flexibility for models that use stablecoins for legitimate purposes, provided that standards for transparency, backing, and user protection are in place.

International payments: an opportunity for Mexico

With more than $60 billion in remittances sent to the country each year and a constantly expanding digital ecosystem, Mexico is uniquely positioned to harness the potential of stablecoins as a vehicle for cross-border payments. Fintech companies are already developing innovative solutions that allow users to send and receive payments with less friction than traditional banking options.

For example, we have participated in the legal analysis of models that use stablecoins to fund digital wallets from abroad, facilitating instant payments between Mexico and the United States without direct involvement from the traditional banking system. When properly structured, these solutions can meet current legal requirements regarding tax and compliance.

In addition, stablecoins could help bridge financial inclusion gaps by enabling the unbanked to access digital payment and savings methods more efficiently and at lower cost.

Lessons from Abroad

The European Union has taken a decisive step by including stablecoins within the MiCA (Markets in Crypto-Assets) Regulation, establishing clear requirements for their issuance, backing, and oversight. In the United States, the regulatory debate remains open, but initiatives such as the STABLE Act are already in place (if you’d like to learn more about this topic, I invite you to read this article I wrote), as well as actions by the SEC and the Treasury Department to define responsibilities for issuers.

Mexico could adopt a phased approach, first establishing clear legal definitions and a registry of custodians and issuers, accompanied by transparency rules regarding reserves, audit mechanisms, and authorization or notification processes, depending on the level of risk.

Furthermore, although Mexico has not yet taken full advantage of the regulatory sandbox, the creation of a specific sandbox for stablecoins could be considered, allowing authorities to observe and evaluate different models under controlled conditions before issuing final regulations.

Conclusions and Recommendations

The use of stablecoins in Mexico is not a future possibility but a present reality. Their impact on international payments, operational efficiency, and financial inclusion is tangible. However, the current legal framework is not equipped to address their implications.

Mexican regulators must urgently establish a clear framework for recognizing, supervising, and responsibly leveraging the use of stablecoins. This would not only provide legal certainty to market participants but also cement Mexico’s position as a regional hub for financial innovation in Latin America.

Effective regulation must emerge from coordinated dialogue among Banxico, the CNBV, the SHCP, and the SAT, taking into account monetary, financial, fiscal, and risk-prevention implications. It is essential to create opportunities for public-private collaboration to discuss models, risks, and lessons learned from other countries.

At bgbg, we specialize in virtual assets, regulatory compliance, and the legal structuring of fintech models. We can assist companies in the sector with:

• Regulatory review of products related to stablecoins.
• Drafting of terms and conditions, custody agreements, and privacy notices.
• Tax and AML compliance.
• Dialogue with financial authorities.

Now is the time to determine the legal future of stablecoins in Mexico, and at bgbg, we are ready to play our part in that process.