Creative laws underpin Latin America’s fintech expansion, but the region’s growth is testing how quickly regulators can set clear rules. Fintech startups increased 340% in six years, leading in financial inclusion, cross-border payments and instant payments, according to Global Finance’s report.

Brazil, Colombia and Mexico account for about 57% of the region’s fintech companies. Remittances, loans and financial management are the main segments. Brazil has advanced rules for digital payments, while El Salvador uses a regulatory sandbox.

Creative Laws Underpin Different Regulatory Paths

Eduardo de Los Heros, legal manager at Mexican cryptocurrency trading service Bitso, cautioned that creative regulation is not automatically good regulation. He pointed to Brazil’s digital payments framework and El Salvador’s effort to position itself as a regional crypto hub as examples of distinct approaches.

El Salvador’s National Commission of Digital Assets works with the Central Bank. It regulates certain activities, including crypto, without tying rules to specific technologies. The source says that broader scope can avoid delays in agreeing on blockchain models and help regulate distributed technologies.

Mexico is preparing a Fintech 2.0 Law as digital banks and payment schemes gain users. The country has more than 1,000 fintech companies, second in the region only to Brazil. De Los Heros said the proposed law aims to develop open finance and public access to user data from Mexican financial projects. He said it would also create clear rules for virtual actors, tokenization and stable coins.

The timing remains uncertain. De Los Heros does not expect the law this year; no public draft is available, and no bill is before Congress or the Senate. At the Fintech Festival 2026 in February, National Banking and Securities Commission President Ángel Cabrera said Mexico was technologically ready for Fintech 2.0.

That readiness claim sits alongside concerns about regulatory capacity. Daniel Leiva, a partner at Torres Legal in El Salvador, said Mexico’s rapid fintech growth has outpaced the ability of the Comisión Nacional Bancaria y de Valores to regulate. The source does not provide a timetable for resolving that gap.

Payments Growth Meets New Standards

Colombia offers another test of how rules meet adoption. The Banco de la República launched Bre-B last October to connect traditional banks, fintechs and digital wallets through one public digital platform. By August, the system had recorded 1.51 billion transactions and more than 35 million users, with 171 financial institutions integrated.

Leiva said those figures could have been higher if the central bank had been less passive and restrictive over the previous couple of years. Colombia’s rapid uptake now meets a new framework from the central bank and the Superintendencia Financiera de Colombia. The rules aim to protect consumers, maintain financial stability and combat money laundering; fintechs must meet the same standards as traditional banks, including rigorous know-your-customer protocols.

De Los Heros said excessive regulation may not be ideal, though it can protect users where advanced banking options are limited.

Brazil’s Pix demonstrates the scale such services can reach: it accounts for more than half of transactions in the country and has about 170 million users. Nubank reached more than 112 million users in January and became Brazil’s largest private bank, according to the Central Bank of Brazil.

Related coverage examines institutional digital asset data, blockchain infrastructure investment and long-term investing strategies.

De Los Heros and Leiva expect heightened regulatory scrutiny as the market matures. Leiva said major players such as Nubank and Mercado Libre did not exist 25 years ago, making regulation complex. He believes Nubank will expand into other regions and said regulators may need banking licenses usable across Central America.

De Los Heros also doubts the industry has all the controls needed for artificial intelligence. The near-term test is whether Mexico’s proposed law advances to a public draft as payment systems in Brazil and Colombia operate at scale.