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Mexican Billionaire Plugs Bitcoin for Bank

Mexican Billionaire Plugs Bitcoin for Bank

Bitcoin’s price rose after billionaire Ricardo Salinas Pliego said his bank was working toward becoming the first Mexican lender to accept the cryptocurrency.

The price of bitcoin climbed to $34,721.11 Monday, up 6.3% from where it stood at 5 p.m. ET Friday, according to Coin-Desk. The digital currency has lost almost half its value since it hit an all-time high of over $63,381.20 in mid April, during a wave of speculation spurred on by celebrity advocates, including Tesla Inc. Chief Executive Elon Musk.

Mr. Salinas Pliego tweeted over the weekend that he recommends the use of bitcoin. “Me and my bank are working to be the first bank in Mexico to accept #Bitcoin,” he added.

Some hours later, he tweeted again in Spanish to say the digital currency was a good way for investors to diversify their holdings. “I think that any investor should start learning about cryptocurrencies and their future. At @BancoAzteca we are working to bring them to our clients,” the post said.

Representatives for BancoAzteca SA didn’t respond to a request for further details or comment.

Mr. Salinas Pliego is chairman of Grupo Salinas, which groups his business interests ranging from retail and banking to broadcasting and telecommunications. He has a net worth of $15.8 billion, according to Forbes, and is close to Mexican President Andres Manuel Lуpez Obrador.

The second Twitter post was accompanied by a graphic showing the price of a cup of coffee rising over time. “The dollar has quietly robbed you of your purchasing power since 1913. Buy bitcoin!” the image said.

In a tweet last November, Mr. Salinas Pliego said he had 10% of his liquid assets invested in bitcoin, which he said “protects citizens from government expropriation.”

Mexica-Salinas Pliego

The Mexican central bank has been wary of cryptocurrencies, warning that they could be confusing for consumers. Bank of Mexico Gov. Alejandro Dнaz de Leуn said earlier this month that Mexican regulations call for keeping a “healthy distance” between virtual assets and the financial system.

“Financial institutions aren’t permitted to finance leveraged positions in crypto assets, receive them as collateral, or even directly offer a portfolio of these crypto assets,” he said.

Cryptocurrencies have gained interest from mainstream financial firms and corporations globally. Mastercard Inc. said it plans to support some cryptocurrencies on its network and Bank of New York Mellon Corp. has invested in a cryptocurrency startup.

But regulators have raised concerns about potential risks to financial stability stemming from the adoption of cryptocurrencies by banks. The Basel Committee for Banking Supervision, the top global standard setter for banking regulation, cited the volatility of digital currencies in proposing substantial buffers for banks dealing in them.

Mexico’s central bank, finance ministry, and national banking and securities commission said in a statement Monday that cryptocurrencies, including bitcoin and others, aren’t legal tender in Mexico, and that financial institutions aren’t allowed to offer operations using them to clients.

“Although they can be exchanged, they do not fulfill the function of money, as their acceptance as a form of payment is limited and they aren’t a good reserve or value reference,” they said.

Price of one bitcoin

Banco Azteca, launched in 2002, began as the consumer credit arm of the Elektra retail chain, which targets low-income customers. It is now Mexico’s ninth-largest commercial bank by assets.

The prospect of greater regulatory oversight of crypto trading in the U.S., China and Europe has weighed on the price of bitcoin and other digital currencies in recent months.

China’s central bank this month ordered the country’s largest banks and payment processors to take a more active role in curbing cryptocurrency trading and related activities.

In the latest crackdown, the U.K.’s lead financial regulator over the weekend told consumers that Binance Holdings Ltd.’s U.K. entity wasn’t permitted to conduct operations related to regulated financial activities. The notice from the Financial Conduct Authority has no direct impact on the services provided on Binance. com, a Binance spokesperson said by email.

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