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  • Mexico's Central Bank Offices, Mexico City, Dec. 2020.

    Mexico's Central Bank Offices, Mexico City, Dec. 2020. | Photo: Twitter/ @ReutersLatam

Published 12 January 2021
Opinion

The Senate approved a bill allowing the deposit of U.S. dollars in cash, which raised alarms on the risk of incurring in money laundering.

Senator Alejandro Armenta announced Monday that a technical committee will be installed to review the reform on the Bank of Mexico (Banxico) Law which would allow U.S. dollars cash deposits without any restriction. 

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The technical panel will hear assessments from representatives of the Finance Ministry, the Banking Association, migrant groups, and the tourism sector. 

Regardless of the origin of the money, the reform presented by senators of the ruling Morena party would mandate Banxico to exchange the U.S. dollars that citizens cannot sell to commercial banks due to anti-money laundering restrictions. 

The remains of such transactions would be also incorporated into the country's international reserves whose use is under the responsibility of the Central Bank.

Approved in December by the Senate, the reform sparked several controversies, which pointed out that the financial system would be open to the money generated by the organized crime.

Currently, banks can only exchange US$300 per day per customer to prevent illegally-sourced dollars from entering the financial system. The monthly limit is US$1,500. 

Pointing out that the reform attempts against banks' autonomy, Banxico Sub-governor Gerardo Esquivel warned that the new regulations could generate financial instability and a high risk of money laundering.

Banxico officials also rejected statements that the law will benefit migrants' remittances, noting that only 1 percent of the remittances are executed in cash, while 99 percent are received electronically. The reform must be debated by the Lower Chamber on February 1.

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