Crypto Exchanges& Regulation in Mexico

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5 min read
Top exchanges in Mexico by Coincub criteria
Article review author
Jonathan Lea
Mexico head image

Crypto Country Rating: 6.6/10

8/10
Institutional acceptance
Accepted but uncoordinated
8/10
Exchanges & Wallets availability
All leading names with high presence and access
6/10
Government regulation
Light and unformulated
7/10
Defi acceptance
Not yet
5/10
Financial services
Leading institutions unconsolidated
6/10
Transparency
Personal data collection and ID required
9/10
Spending crypto
Wide-spread outlets and services
4/10
Banks activity in crypto
Banks yet to tap into marketplace

Bitcoin and cryptocurrency trading in Mexico

Mexico is difficult to score as the population are enthusiastic users of crypto to facilitate their economic needs, but the establishment has no strategy for advancing crypto at an institutional level. 

Law and crypto trading in Mexico

Legal - existing crypto legislation

Mexico is a huge user of crypto, but the concept is used as a tool for many people to gain payment and exchange services – especially in a country with such a high proportion of people who do not have bank accounts. As a result, there are plenty of places to spend and also lots of ATMs, but once again, the majority of the population sees crypto as a fast reliable tool, rather than an investment asset.  Bitcoin enthusiasts in Mexico can take advantage of a wide range of available services including most of the well-known international exchanges available locally along with home-based exchanges of which Bitso is one of the most popular.

Legal - forthcoming crypto legislation

As Bitcoin’s popularity and acceptance grows, cryptocurrency could fulfill a number of important roles in the country’s keenness to embrace financial technology generally.

Taxing cryptocurrencies in Mexico

Income Tax

Cryptocurrencies, for a long time seen as risky by the Mexican government, are now booming within the country – so much so that taxing it is high up on the Government’s list of priorities. However, there has been huge confusion as to classifying the status of a cryptocurrency – whether they are viewed as an asset or a currency. Also, whether it is used as a means of exchange or as a source of investment for gain – in short, talk it through with a tax expert.

Regulations apply for organisations to operate, but there is no centralised and structured approach to crypto and no detailed and consolidated strategy on how crypto is taxed and regulated. The gains you make as an individual will need to be reported to the Ministry of Finance when a trading transaction is over a certain amount equivalent to $2,500.

Tax relief

As an intangible asset, all transactions involving crypto assets should include value added tax, except in certain situations where some exemptions might apply. Any profit arising from the purchase and sale of crypto assets should be subject to a corporate income tax of 30 per cent. In the case of individuals, depending on their accruable income, they can be subject to income tax of 1.92 per cent to 35 per cent, or even be exempt in some cases.

Tax when moving residency

If you are a long-term resident of Mexico you are probably deemed a permanent resident for tax purposes. However, there is no legal restriction for a Mexican citizen or resident to participate in foreign exchanges outside Mexico. Consequently, the foreign exchange does not necessarily have to comply with Mexican laws just because they have a Mexican user. If you are not a permanent resident, and your holdings are outside of Mexico you’ll fall under the required tax laws of your adopted country.

Tax on mining

Once again, gains you make from mining are subject to tax, but as explained previously, Mexico has yet to develop a cohesive taxation strategy for crypto so you’ll be dealt with on a case-by-case basis. You’re more likely need to make provision for your use of energy, subject to the energy legal framework.

Crypto financial services in Mexico

Fin services - retirement planning

Most retirement and pension funds worldwide deem cryptocurrencies to be too volatile to become part of long-term retirement schemes. There is little certainty on this at present.

Fin services - banking

Crypto and digital currencies are a welcome innovation to Mexico’s large populations, many of whom do not have bank accounts. Mexico’s traditional financial services, loans and credit cards etc., are viewed as expensive when compared to setting up a crypto account and the banking establishment is looking at how to tap into this marketplace.

Fin Services - DeFi

Mexico’s banking and insurance sector recognises how FinTech businesses can attract a significant number of customers and have started developing innovative solutions as well as forming various types of partnerships with companies in this field.

Using crypto in Mexico

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Gifting crypto

If you’re feeling generous you can gift your crypto and there isn’t a specific tax implication on doing so.

Crypto regulation in Mexico

Security

As always it pays to do some research into the exchanges and how much support and protection they offer – or if they are insurance against unforeseen problems.  In all cases you need to make a clear record of your dealings. Home-based securities may be able to provide more customer support but you need to check. There are strict fintech licensing requirements and crypto firms must report transactions over a certain amount, but tax issues have not been firmly pinned down in crypto activities and appear to be dealt with on a case-by-case basis.

Transparency

Cryptocurrencies in Mexico have a wider user base, but there is no regulated market environment or designated authority to control the taxation of income from cryptocurrencies.You’ll have to disclose ID and details when opening an account with any exchange.

Helpful?
FAQ

New to crypto? Here’s our guide!

FAQ Image #1 01 Why Bitcoin? It seems like the buzz around Bitcoin just keeps growing. Bitcoin is a constantly evolving technology with a passionate community. What is it about the digital asset that makes it such a controversial topic and attractive investment?
FAQ Image #2 02 How to Get Started with Bitcoin It can be difficult to get past the technical jargon surrounding bitcoin (BTC) and other cryptocurrencies in order to figure out how you can buy and store them. Beginners can purchase Bitcoin, for example, on many exchanges using fiat currency like U.S. Dollar, Euro or British Pound.
FAQ Image #3 03 Blockchains 101 Blockchains are a type of database where data is stored in blocks that are chained together. As new data comes in, it is entered into a block, which is then chained to the previous block. The Bitcoin blockchain serves as a ledger that records every Bitcoin transaction in history.
FAQ Image #4 04 Bitcoin in the Real World Ok - you’ve found an exchange, bought your Bitcoin, and stored it safely. What’s next? By now you can buy just about anything with Bitcoin if you try hard enough, from Amazon gift cards to an old master painting. You can also convert your BTC to fiat with ATMs, an exchange, and more.