NVIO has a deadline of six months to begin operations or its license can be revoked. The registration of a subsidiary corresponds to Bitso’s plans to adapt to the regulation.

Last January 22nd, the firm NVIO, a subsidiary of the Mexican cryptocurrency exchange Bitso, became the first financial institution to obtain permission from the National Banking and Securities Commission (CNBV) to provide services in the Spanish-speaking country as an Electronic Payment Funds institution under the supervision of the Law to Regulate Financial Technology Institutions (FinTech Law). This company is among the other 84 that have submitted the requirements for their legal registration, whose deadline expired on September 26th, 2019.

It was officially announced that CNBV had granted authorization to operate in Mexico to NVIO Pagos Mexico, a company that complied with the legal, financial and operational requirements demanded in the framework of the implementation of the FinTech Law. Besides, the company must begin its authorized operations within six months after the date of publication of the announcement (January 22nd, 2020) or its license can be revoked.

NVIO Pagos México must also prove to CNBV, at least within the next 30 business days before starting its operations, that it is duly constituted as a Mexican legal entity that meets the minimum capital requirements. Likewise, it must demonstrate that it has a board of directors, management composition, the required technological infrastructure, and adequate internal controls, as well as all the policies and manuals required by the FinTech legislation.

The authorization allows the startup to issue, trade or manage electronic payment funds, provide money transmission services from Mexico abroad, obtain loans and credits from third parties, issue securities on its own as shares, stocks, and obligations, as well as receive or deliver amounts of cash, among others. CNBV, jointly with the Bank of Mexico and Condusef, is the institution that will be in charge of supervising compliance with the FinTech Law and imposing fines in the case that the legislation is broken.

The FinTech Law, which entered into force in March last year in Mexico, is a legal instrument including not only cryptocurrency exchanges but also collective financing companies, payment and remittance funds, and even banks.

Bitso’s Plan

Apart from being requested to enter the regulatory framework, cryptocurrency exchanges have been forced to modify their operational processes. Otherwise, they would have risked not being in under the legal framework in force in Mexico.

Emilio Rivero, the company’s senior risk and corporate affairs analyst, said that Bitso had adapted to the regulation by separating its operations into two parts. In other words, as long as Mexican pesos are used, customers will continue using existing services such as the Interbank Electronic Payment System (SPEI), cash financing or Bitso Transfer. These services will remain under the operational supervision of the business name Bitso SAPI de CV, which is regulated by the FinTech Law of Mexico.

Rivero also explained that, regarding interactions with crypto assets, all of Bitso’s activities, including the custody, transmission, withdrawal, and trading of cryptocurrencies, were migrated to a jurisdiction outside Mexico. Since next August 1st, these operations will be under a framework specifically developed to regulate business in the cryptocurrency sector of the Gibraltar Financial Services Commission (GFSC).

These movements are part of Bitso’s strategy to adapt to the rules issued by the Central Bank of Mexico (Banxico), which prohibit financial technology institutions (FTI) or credit institutions (CI) to offer the general public operations with cryptocurrencies.

By Alexander Salazar


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