Crypto Money Laundering, War Affect Mexican Economy
Global manufacturing and logistic chains, which were starting to recover from the COVID-19 pandemic, are at risk from the Russia-Ukraine war, warns a BBVA report. Meanwhile, the EU introduced new rules for cryptocurrencies to avoid their use in money laundering schemes, which is already occurring in Mexico according to a UN report.
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Mexico Fails to Seize Pacific Alliance Opportunities
“Mexico is the country in which businessmen use [the Pacific Alliance] protocol the least," said Luz María de la Mora, Deputy Minister of Foreign Trade, Ministry of Economy. The country uses Pacific Alliance protocols for only 0.1 percent of its traded goods. Meanwhile, Peru and Colombia use the protocols in 11 percent and 11.3 percent of their trade, respectively. Mexico’s lack of participation comes mainly from its close relation with the US and Canada and the USMCA trade agreement.
Key financial products can help companies manage their finances and protect themselves from risks. However, these products are often available only to large companies. “SMEs often have difficulty dealing with administrative complexities and meeting their month-to-month financial needs. This is not because the businesses are not profitable or well run, it is simply that the timing of money “in” and “out” can sometimes be wildly mismatched, putting strain on the business,” said Sebastian Kreis, CEO and Co-Founder, Xepelin.
Bottlenecks in Supply Chain will Affect Mexico
Global production is beginning to recover after the COVID-19 pandemic but logistics could suffer another major blow following the Russian invasion of Ukraine, according to BBVA. Higher-than-expected inflation levels and restrictive global policies will most likely affect Mexico’s recovery process as well.
Mexican Cartels Launder Through Bitcoin: UN
A UN report explained that Mexican cartels are believed to launder some US$25 billion a year using cryptocurrencies. These criminals often deposit small amounts of money into multiple bank accounts and use those accounts to make online purchases of Bitcoin and other cryptocurrencies, as reported by MBN.
European Union Parliament Provides New Rules for Cryptocurrencies
The EU Parliament agreed on pursuing a uniform legal framework for crypto-assets, while drafting rules to support security regarding the utilization of these currencies. “Consumers would be better informed about risks, costs and charges. In addition, the legal framework supports market integrity and financial stability by regulating public offers of crypto-assets,” explained the EU.