FINTECH & CRYPTOASSETS NEWSLETTER
July to September 2020
THE TAX ADMINISTRATION SERVICE (SAT) PUBLISHES THROUGH THE FEDERAL OFFICIAL GAZETTE (@”DOF”) THE LIST OF DIGITAL SERVICE PROVIDERS.
September 9, 2020
The SAT released through the DOF the list of digital service providers, registered in the Federal Taxpayer´s Registry or “Registro Federal de Contribuyentes”, in terms of article 18- D section I of the Value Added Tax Law (Ley del Impuesto al Valor Agregado), in the understanding that, it is the obligation of residents abroad without a permanent establishment in Mexico, to provide digital services to receivers located in national territory, to register in the Federal Taxpayers´ Registry.
NATIONAL BANKING AND SECURITIES COMMISSION ENABLED THE DIGITAL PLATFORM FOR FINTECH AUTHORIZATIONS.
September 10, 2020
Due to the sanitary emergency, the National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores or “CNBV”) implemented a digital platform to restart, based upon more than 80 requests for authorization to operate as Financial Technology Institutions. In said platform, applicants must add all the documents related to the application for authorization to operate, in terms of the Law to Regulate Financial Technology Institutions. Once the documentation and information have been submitted by this means, the CNBV, through the General Direction of Supervision of Financial Technology Institutions, must verify and resolve the submissions made.
MODIFICATIONS TO THE RULES APPLICABLE TO THE PROVISION OF RESOURCES TO CREDIT INSTITUTIONS TO CHANNEL CREDITS TO MICRO, SMALL, AND MEDIUM-SIZED ENTERPRISES, AS WELL AS INDIVIDUALS.
September 11, 2020
Banco de México published in the DOF, the Official Communique 33/2020 regarding the rules applicable to the provision of resources to credit institutions to channel credits to small and medium-sized enterprises (SMEs); as well as individuals, in order to modify the respective section 2.3 “Repo transactions”.
Institutions must submit the following information through the electronic, computer or telecommunication means, indicating for this purpose:
i) The disposition that requires making the entire amount requested in a single payment on the date established for it.
ii) In the event that the disposition is requested in installments, the amount of the first provision needed must be indicated, from the total that the Bank of Mexico assigns as a result of said request.
iii) In the case of repurchase agreements offered in accordance with the rules mentioned in circular 33/2020.
iv) The proportion of credit transactions allowed, with the resources obtained from Banco de México, in accordance with the rules.
v) The number of companies with which it intends to carry out the aforementioned credit transactions, with respect to which said Institution declares that it is not possible to verify the number of employees such companies have, under the assumption that the Institution may only carry out with these companies credit transactions.
In addition, it published Official Communique 34/2020, relating to financing guaranteed with bank loan assets that Banco de México can grant to credit institutions, for channeling to small and medium-sized companies (SMEs), modifying sections 3.7 related to the guarantee trust and 4.4 in relation to repurchase agreements.
RUSSIA: CRYPTOASSETS REGULATION
In last July, the Russian Parliament approved the Law on Digital Financial Assets, which will come into effect on January 1, 2021. The most important aspect of this law is the restriction of paying for goods and services with crypto assets or cryptocurrencies within the Russian Federation. Likewise, this same Law defines two terms of cryptoassets:
1. Digital assets: “a right to a monetary claim or an instrument to exercise a right over certain securities or shares.” This definition includes the currencies backed by the US dollar, such as the Tether, or the Ethereum tokens, ERC-20.
To issue these digital assets, it is mandatory to inform the Russian Central Bank, which will have knowledge about the functions and rights of the asset and will subsequently make it available to qualified investors.
2. Digital Currencies: “they are a set of electronic data that can be adapted to investments.” The law indicates that these currencies are not recognized as a monetary unit, so they cannot be used to pay for goods and services.
Furthermore, this Law regulates the issuance of digital financial assets (DFA) with the supervision of the Central Bank of Russia. In other words, companies will be able to issue digital securities (tokens) on a blockchain if they are duly registered and licensed with the Bank of Russia as issuers and meet certain rigorous criteria.
UNITED STATES OF AMERICA
BANKS MAY OFFER CRYPTOCURRENCY CUSTODY SERVICES
The Office of the Comptroller of the Currency (OCC), announced in a letter that now national banks in the US are authorized to offer custody services for cryptocurrencies. In detail, any national bank can retain the unique cryptocurrency private keys for a portfolio, allowing the bank to safeguard the digital assets of its clients.
WASHINGTON DC RECOGNIZES BITCOIN AS MONEY
A court in Washington, D.C. determined that Bitcoin is a form of money under the Money Transmitters Act of that district. The Chief Justice of the Court defined money as a medium of exchange, method of payment or store of value, noting that Bitcoin falls within that definition.
CRYPTOCURRENCY COMPANIES SELF-REGULATE
To promote the use and market of cryptocurrencies such as bitcoin in Brazil, the exchange platforms, members of the ABCrypto association (which mobilize up to 80% of the volume of all transactions), recently signed a code of self-regulation of the market of cryptocurrencies. This document seeks to legitimize and ensure the use of crypto assets in Brazilian territories. This code includes regulation on custody, brokerage and exchange and the measures that must be implemented to prevent crime and money laundering on its platforms. Specifically, it indicates the basic requirements of “know your client”, the security parameters and forces the platforms to strengthen their legal infrastructure, to respect free competition and the privacy of user information. It also establishes sanctions in case of non-compliance.
DRAFT CRYPTOCURRENCY LAW
Soraya Thronicke, a Brazilian senator, presented a bill (4.207 of 2020) that aims to regulate transactions with cryptocurrencies, under the supervision of the Central Bank and the Brazilian Securities and Exchange Commission.
In the first case, if cryptocurrencies are used as a means of payment, the Central Bank will issue the regulatory framework. On the other hand, if it is used as a guarantee or investment instrument, the Stock Market Commission will do it. Some provisions are:
- For companies to custody cryptocurrencies, they will have to obtain the authorization of the investor to use their funds.
- Only legal persons may issue virtual assets, which must justify their issuance, that it is compatible with their activities.
- Provide “clear, accurate and non-misleading” information to its clients on assets and tax obligations.
- Serious penalties for financial crimes and illicit profits, such as speculation or fraud.
Finally, the bigger purpose of this law is to give the State greater authority over the collection of taxes on activities using cryptocurrencies.
THE CENTRAL BANK OF BRAZIL COULD LAUNCH ITS OWN DIGITAL CURRENCY IN 2 YEARS.
September 11, 2020
Brazil’s central bank could have its own central bank digital currency (CBDC) within 2 years. The local publication Correio Braziliense, pointed out that the South American giant could launch its own currency in 2022, the President of the Central Bank, Roberto Campos Neto, has said that the institution has been adopting measures to modernize the country’s financial system for a long time. that the launch of a CBDC is another step for the evolution of the country.
Among the measures adopted is the PIX, the instant payment system in Brazil, which allows users to carry out transactions between individuals and legal entities in less than 10 seconds through their smartphones.
Among other measures implemented in the financial sector is the open banking system, which allows the exchange of user information between banks.
EUROPEAN COMMISSION PROPOSES TO CREATE CRYPTOCURRENCY SUPERVISORY AGENCY.
September 11, 2020
In the coming weeks, the European Commission (EC) will announce a cryptocurrency regulation project, especially for stablecoins, which will be applicable in the member countries of the European Union and will come into force at the end of 2020. The Central Bank Digital Currencies (CBDC) will be exempted from regulation.
THE MINISTERS OF FINANCE OF THE EUROPEAN UNION (EU) ASKS FOR GREATER CONTROL OF ISSUERS FROM STABLECOINS
September 14, 2020
European Union finance ministers have called for greater control of stablecoin issuers, Reuters reported. According to the publication, officials from France, Germany, Spain, the Netherlands and Italy made this request during the EU event held this weekend in Berlin.
Specifically, the German Finance Minister, Olaf Scholz, has argued that stable crypto assets should not be able to be used within the block unless they comply with current regulations. For his part, Bruno Le Maire, the French Finance Minister, said: “The central bank, I mean the ECB, is the only one that can issue a currency. And this point is something that cannot be put endangered or weakened by any kind of project, including the so-called Libra project [from Facebook] “.
Reportedly, among the measures that could restrict the use of stablecoins in the block is the creation of an oversight group made up of “national and European authorities” aimed at overseeing activities related to crypto assets in the European Union.
Current European laws define the principles to regulate some aspects of the sector, for example, security tokens. In the time being stablecoins remain in a gray area.
GERMANY: THE GERMAN REGULATOR CLARIFIES THE GUIDELINES THAT BITCOIN ATMs MUST COMPLY WITH.
September 7, 2020
The Federal Financial Supervisory Authority (BaFin, for its acronym in English), as regulator has just announced all bitcoin ATM providers are required to receive approval from the regulator to operate in the country. The regulator affirms that the public installation of ATMs in which crypto assets such as bitcoin, litecoin, ethereum or dash can be sold or bought can only be carried out after the approval of the control body.
SWITZERLAND: NEW PRINCIPLES TO REGULATE CRYPTOASSETS
September 10, 2020
The Swiss parliament approved a series of amendments to the legislation that will lay the legal basis for crypto-asset exchanges, the exchange of values exclusively through digital means, the “Blockchain Act” is expected to come into force in early 2021.
The new rules also refer to including new standards for virtual asset exchanges, as well as rules to avoid money laundering. Similarly, it defines the procedures for the return of crypto assets and the principles of exchange of digital values, it will also allow companies to discover opportunities related to Blockchain technology, including the registry of assets, digital art and private capital.
For more information on this or any related topic, please contact the members of our FinTech & Cryptoassets teams.
Diego Ramos Castillo. email@example.com
Antonio Casas Vessi. firstname.lastname@example.org
Rodolfo Ramos Ortiz. email@example.com
Arturo Canseco Álvarez. firstname.lastname@example.org
Guadalajara | Américas 1500, piso 14, Col. Country Club, Guadalajara, Jalisco, México
+52 (33) 3627 5035 + 52 (33) 3121 3014
Ciudad de México | Torre Esmeralda I, Blvd. Manuel Ávila Camacho 40, Piso 14, Lomas de Chapultepec, V sección, Miguel Hidalgo, 11000, Ciudad de México.
+ 52 (33) 1518 0445 + 52 (55) 6823 3004