Mexico's Secretariat of Finance and Public Credit (SHCP) has clarified its stance on bitcoin, deeming it a means of payment whilst placing a series of restrictions on transactions involving the digital currency.Following the Bank of Mexico's warning about the use of virtual currencies last year, the SHCP said bitcoin will be subject to the same restrictions placed on some transactions involving cash or precious metals.A loosely translated version of the statement reads: "According to guidelines focused on the risks of virtual currencies issued by Grupo de Accion Financiera Internacional (GAFI), the use of virtual goods on an international level has resulted in a new way of transferring value via the Internet.For this reason, it is necessary to take action on a national level to identify and lessen the risks that any of these instruments be used to launder money or finance terrorism."It continues: "With this in mind, and taking into account the remit of this Administrative Unit, we include virtual goods in the prohibition stated in article 32 of LFPIORPI, so it is forbidden to fulfil obligations, and in general, liquidate or pay, as well as accept payment in virtual goods as stated in the aforementioned article."

Article 32 of Mexico's LFPIORPI – the country's federal law which sets out to prevent and identify operations transacted with illicit goods – states that the use of cash or precious metals to purchase property or goods is prohibited in certain instances.Among others, one clause notes that neither cash nor precious metals shall be used when buying property equivalent to more than 8,025 times the minimum salary at the time of sale.Additionally, the same prohibition applies to vehicles worth more than 3,210 times the minimum salary.The LFPIORPI, enacted by Mexico's former president Felipe Calderón, came into law in July 2013.Mexico flag image via Shutterstock.A recent article by El Universal implied that the taxation arm of the Mexican government, Servicio de Administración Tributaria (SAT), would prohibit bitcoin use due to money laundering concerns.According to a recent post by online blogger Victor Hernández’s, the article released was incorrect.Although changes have been made in the treatment of bitcoin, it is in no way banned.

Bitcoin is now to be regulated under Federal Law on the Prevention and Identification of Operations with Illicit Resources, an anti-money laundering law which was established in 2013.According to Mónica Ramírez Chimal, founder and partner of Mexico City based consulting firm, ASSERTO RSC, the regulation will affect fifteen activities that are vulnerable to money laundering.“The regulation of these activities[...] is consistent with international standards such as the Financial Action Task Force and the European Union Directives.” Ex-President of Mexico, Felipe Calderon, signed the regulation into law in an effort to combat transnational crime.“The prevention of money laundering and combating financial terrorism is a fundamental part of the state's comprehensive strategy against organized crime," he stated at the time.Mexico is no stranger to money laundering.Mexican drug cartels are responsible for vast amounts of money moving in and out of the country.Award winning Zeta magazine recently reported on the indictment of two men, Ayon Diaz and Contreras Arriaga who have been accused of using multiple “casas de cambio,” currency exchange houses, in Tijuana.

Over $45m was laundered between Mexico and United States banks over a two year period, and was tied to the Sinaloa Cartel’s drug trafficking.- US National Money Laundering Risk Assesment The regulation was put in place to tackle these money laundering issues, by placing restrictions on certain transactions using pesos, foreign currency, precious metals and now bitcoin.backing up bitcoin-qtNo on in Mexico can purchase real estate property with a value greater than $500,200 Pesos, US$29,239, with cash or precious metals.bitcoin dari a-adsThe purchase of goods, such as boats, cars, jewelry, art, gambling tickets or the transfer of shares or equity quotas with a value over $200,000 Pesos, US$11,691, is also banned.bitcoin 500gh

- Martindale Overview of Mexico’s Anti-Money Laundering Law Bitcoin related companies are now expected to submit reports on vulnerable activities to the Secretaría de Hacienda y Crédito Público, The Ministry of Finance in Mexico.bitcoin windows rtUnder this law, there are obligations to identify clients and users, to retain and safeguard documentation, and to file relevant notices to the Ministry of Finance and to appoint an individual to be in charge of compliance.mises institute bitcoinThe introduction of the this law saw some industries lose income.bitcoin stealing trojanAs reported by the Washington Post, The Morton auction house experienced a 25 to 30 percent drop in sales.bitcoin regulation in mexico

According to the auction house director, Luis C. Lopez Morton, customers were afraid to make cash purchases, “They feel uncomfortable.They feel that the government is watching them.” Whether the application of this regulation will extend to bitcoin companies is yet to be seen.bitcoin kraken exchangeHowever, there are companies which are moving full steam ahead with incorporating digital currencies into their existing infrastructures.bitcoin mining dell serverMost recently MercadoLibre Mexico announced its payment platform MercadoPago has integrated Bitcoin payments.MercadoLibre was founded by Marcos Galperín, employs over 3,000 people, and operates in 12 countries throughout Central and South America.Should the MercadoLibre experiment with bitcoin be successful, the platform could streamline adoption throughout South America.