Home Features ‘Creative’ Laws Underpin LatAm’s Fintech Expansion
Author: Nic Wirtz | Photos: Shutterstock
Strong regulation and dynamic regulators are helping nurture a fintech boom across the region.
This article appears in the October issue of Global Finance Magazine.
The number of fintech startups in Latin America has grown by 340% over the past six years as these companies take a leading position in areas such as financial inclusion, cross-border payments, and instant payments.
Nubank reached a milestone in January, becoming the largest private bank in Brazil with over 112 million users, according to the Central Bank of Brazil. The instant payment system Pix now accounts for more than half of transactions in the country and has some 170 million users, with 80% to 95% of the country using the service.
“Creative laws are not always good laws. So you can have very creative regulation that is not necessarily very good regulation,” said Eduardo de Los Heros, legal manager at Bitso, a Mexican cryptocurrency trading service and fintech. “Brazil has very advanced regulation for digital payments, and El Salvador has made Bitcoin its calling card to position itself as the crypto regional hub.”
Brazil, Colombia, and Mexico account for about 57% of all Latin American fintechs, with remittances, loans, and financial management the main segments. In Mexico, the arrival of Mercado Libre and its subsidiary Mercado Pago, as well as Nubank, has forced traditional banks to offer their own digital alternatives.
“Mexico and Brazil, as the biggest economies, are pushing towards regulation. El Salvador is small but dynamic and has a fantastic regulatory sandbox,” said Daniel Leiva, partner at Torres Legal in El Salvador. “Then there are countries that are also pushing forward, like Colombia and Argentina. Argentina is fighting to integrate fintechs into the economy.”
With a Fintech 2.0 Law due in Mexico, the market is starting to mature as adoption of digital banks and payment schemes increases across the region. Mexico now has over 1,000 fintech companies, second in the region only to Brazil.
“This famous law has the objective to develop open finance as well as public access to user data of Mexican financial projects,” said de Los Heros, “creating clear regulations for virtual actors, tokenization, and stable coins.”
That would not be a minute too soon, as Mexico’s rapid fintech expansion has outstripped the Comisión Nacional Bancaria y de Valores (CNBV)’s ability to regulate, Leiva said.
De Los Heros does not believe the law will be ready this year; there is no publicly available draft of the law, nor is a draft bill before Congress or the Senate. Yet, speaking at the Fintech Festival 2026 in February, CNBV President Ángel Cabrera claimed that Mexico was technologically ready for Fintech 2.0, adding, “The CNBV’s vision is to build an ecosystem of digitally born entities that generate value where cash still predominates today.”
Leiva points to El Salvador as another example of dynamism in the industry.
With one regulator, the National Commission of Digital Assets (CNAD), working in tandem with the Central Bank of El Salvador, the focus has been on neutral laws; CNAD regulates certain types of activities, like crypto, without marrying the law to specific technologies. A broader scope allows for quicker adoption and avoids delays in achieving regulatory consensus on specific blockchain models, for example. This enables distributed techn…