Peru’s Congress to Discuss Bill to Regulate Cryptocurrencies

The proposed bill highlights that Bitcoin is an asset with a book value and serves as a capital contribution for incorporation by companies.
According to the proposal presented by the legislators, the use of cryptocurrencies “is the absolute responsibility of their buyers.”
Peru is one of four Latin American countries to have adopted wide-scale use of BTC and other cryptocurrencies.

The bill was presented to Congress in December 2021 by legislator José Elías Ávalos of the Podemos Peru party, and is now awaiting discussion. The objective of the proposal is to create a regulatory framework for Bitcoin and other cryptocurrencies.

As in other Latin American countries such as Colombia, Uruguay, Panamá, Argentina and Brazil, in the coming weeks Peru is preparing to start the debate around the benefits and risks related to cryptocurrency trading in the plenary of parliament.

The proposal, which has been published on the official website of the Peruvian Congress under the name of “Framework Law for the Commercialization of Cryptoassets,” includes several points related to the growing cryptocurrency trade in the country.

It seeks to “establish the guidelines for the operation and functioning of crypto-asset exchange service companies through technological platforms, based on the principles of free market and free competition,” according to the document.

On the Flipside

The bill clarifies that “crypto assets are not considered legal tender” in the country.

The proposal indicates that:

“The acquisition and use of crypto assets and cryptocurrencies are the absolute responsibility of their buyers and owners who, based on free market and free competition principles, must seek to inform themselves of the risks inherent in trading with assets of any kind.”

According to Ávalos, the bill seeks to regulate all current and future crypto exchanges and Bitcoin digital wallets that are operating in the country.

The need to regulate cryptocurrency trading by Peruvian legislators was spurred on by the growing adoption of BTC and other cryptocurrencies in the South American country.

During the first half of 2021, cryptocurrency trading in Peru increased by more than 600% when compared with the same period in 2020, as reported at the time by the local newspaper ‘La República.‘

The bill also establishes certain requirements for the commercial operation of cryptocurrencies in the region. Among them is the creation of a new public registry of service providers related to the crypto industry.

One of the points to be contemplated in the proposal is the matter of legal obligation to report “suspicious operations” that involve BTC or any other crypto assets to the Financial Intelligence Unit. Likewise, it establishes “criminal liability in the acquisition and misuse of crypto assets and cryptocurrencies.”

Platforms which operate Bitcoin must register with the Superintendency of Banking and Insurance of the country. The bill also highlights that digital assets will serve as a capital contributions for the constitution of joint-stock companies (S.A.), and will therefore have a book value.

Why You Should Care

The most used cryptocurrency in Peru is Bitcoin according to exchange platform ‘Buda.com.’ A study conducted by the company between March and April 2021 found that BTC transactions in the country increase by an average of 20% each week.
Peru was ranked eleventh globally by use of cryptocurrencies in 2021, according to data from Statista.