The Peruvian government introduced legislation in December seeking to regulate cryptocurrency interactions occurring in the country at the moment. The draft law defines what a crypto asset is and defines the duties of providers of virtual asset services (VASPs), and seeks to legalize the use of assets to form companies and to be held by companies.
First attempt at regulating cryptocurrency in Peru:
A new draft law entitled “Cryptoasset Marketing Framework” has been introduced in the Peruvian Congress under the number N° 1042/2021-CR, in the first attempt by the country to regulate cryptocurrency interactions.
Jose Luis Elias Avalos, a member of the “Podemos Peru” parliamentary group, presented the project on December 10. It defined several key concepts in the crypto world, including crypto assets, virtual asset service providers (VASPs), blockchain, and cryptography.
Additionally, the law provides for creating a public registry for VASPs, which users can consult anytime to check if a platform or exchange is registered to do business in Peru. Furthermore, it specified the conditions each VASP must meet to operate legally in the country.
Under the draft, these companies are obligated to inform the user that Peru does not consider cryptocurrencies to be legal tender in their contract of services and that the government’s supervision of these assets does not provide a guarantee against the risks associated with cryptocurrency operations.
A law in Peru further provided a legal basis for companies to hold crypto assets, as crypto-assets can be used for company formation and incorporation. To begin with, the proposal specified that the value of the cryptocurrencies should be recorded when the company is incorporated.
The draft explained that if the company intends to sell cryptocurrencies, they should be considered inventory assets. In other circumstances, they should be considered property or intangible assets.
It is yet another country in Latam to jump on the cryptocurrency regulation bandwagon, after Brazil, Paraguay, Venezuela, and El Salvador, who are developing – or have already established – cryptocurrency-specific laws. Nonetheless, the draft does not consider bitcoin legal tender, as El Salvador’s “Bitcoin law” does. Last year, the law went into effect, pushed by El Salvador’s president Nayib Bukele, who also predicted two additional countries would legalize bitcoin this year.
