Cryptocurrency Draft Law Presented in Peru

A draft of a new cryptocurrency asset law was introduced in Peru in December, seeking to regulate the cryptocurrency interactions that are already happening in the country. The draft law, besides defining what a crypto asset is and establishing the duties of virtual asset service providers (VASPs), also seeks to legalize the use of assets to incorporate and be held by companies.

A new piece of draft legislation called “Cryptoasset Marketing Framework” has been introduced in the Peruvian Congress under the number N° 1042/2021-CR, in the first attempt of the country to regulate cryptocurrency interactions. The project, which was presented December 10 by Jose Luis Elias Avalos, a member of the “Podemos Peru” parliamentary group, defines several key concepts in the cryptocurrency world, including crypto assets, virtual asset service providers (VASPs), blockchain, and cryptography.

The law also proposes the creation of a public registry for VASPs, that users can consult anytime to find out if an exchange or platform is registered to do business on Peruvian soil. In addition, it establishes the conditions that each VASP must follow to operate lawfully in the country.

The draft compels these companies to inform, in their contract of services to the user, that Peru does not consider cryptocurrencies legal tender, and that the supervision of these assets by the government constitutes no guarantee against the risks that operating with cryptocurrencies can bring to users.

The law further considers that crypto assets could be used to create and incorporate companies, and gives a legal base for these companies to hold crypto in Peru. In the first case, the proposal states that the value of the cryptocurrencies should be recorded at the moment of the constitution of the company. In the second case, the draft explains that if the company intends to sell them, cryptocurrencies should be considered inventory assets. In other considerations, they should be considered property or intangible assets.

Peru is yet another Latam country that has jumped on the cryptocurrency regulation bandwagon, behind countries like Brazil, Paraguay, Venezuela, and El Salvador, which are working on — or have already established — cryptocurrency-specific laws. However, the proposed draft does not consider bitcoin legal tender, as El Salvador’s “Bitcoin law” does. The law went into effect last year, pushed by El Salvador’s president Nayib Bukele, who also predicted that two new countries would make bitcoin legal tender this year.

What do you think about the newly proposed law to regulate crypto assets in Peru? Tell us in the comments section below.