It might have got in the game later than other leading regions such as Europe and The United States And Canada, however Latin America’s fintech industry is dynamic and growing fast. The sector was just recently given an evaluation of more than $ 150 billion and continues to expand year-on-year.
And while the longer-term impact of COVID-19 on the sector is yet to be figured out, there’s no doubt that the need for specific fintech solutions is on the rise. As smaller sized banks across the area are under pressure to digitize, lots of are getting in touch with fintechs to assist them along this journey. In addition, a number of SMEs are looking for digital loan services to help them make it through the crisis.
The sector’s speedy growth has actually implied that regulators in LatAm are under increasing pressure to enact legislation that attends to the murky waters of fintech activity, supplying self-confidence to customers and investors alike. Nevertheless, policy across the area must beware to not quash innovation, while startups should figure out how to be nimble in an environment which is becoming significantly regulated. Let’s take a closer take a look at what effect guideline has had up until now in LatAm, and what needs to happen to strike a balance in between sector development and public trust.
The development of fintech regulation throughout LatAm
Mexico is currently leading the way when it comes to fintech guideline in LatAm, thanks to its detailed 2018 fintech Law. The law covers most fintech activities, including crowdfunding, virtual wallet, transactions carried out with cryptocurrencies and open banking. In addition, Mexico has certain financial laws that manage financial entities in their execution of transactions using fintech. The law also supplies a regulatory sandbox for both non-licensed and certified companies.
Brazil is the outermost ahead after Mexico, as it separately legislates crowdfunding and peer-to-peer lending, while a special congressional commission is working on a broader legislative method. Brazil’s Central Bank likewise ventures to make open banking legislation effective by the third quarter of 2020, which will pave the way for a growing open banking ecosystem.
Article curated by RJ Shara from Source. RJ Shara is a Bay Area Radio Host (Radio Jockey) who talks about the startup ecosystem – entrepreneurs, investments, policies and more on her show The Silicon Dreams. The show streams on Radio Zindagi 1170AM on Mondays from 3.30 PM to 4 PM.