CMS Expert Guide to Crypto Regulation in Peru

Disclaimer: This chapter was last updated on 1st August 2024 and does not reflect any subsequent developments. The information provided is intended for general informational purposes and should not be construed as legal advice.

Cryptoassets are unregulated and lack a legal definition under Peruvian law, and therefore, do not have a regulatory entity. In this regard, the Peruvian regulators, the Superintendency of the Securities Market (Superintendencia del Mercado de Valores – “SMV") and the Superintendency of Banking, Insurance and Pension Fund Administrators (Superintendencia de Banca, Seguros y AFP - "SBS") have issued statements indicating that they are not the competent entities to regulate cryptoassets.

However, Peruvian legislation does not expressly prohibit the acquisition of or transactions with cryptoassets. Therefore, there is a legal vacuum that allows the use of cryptocurrencies in the Peruvian market by individuals who agree to use them, who may establish the applicable rules as long as they do not go against the Peruvian public order and imperative regulations. Nonetheless, Peruvian law establishes restrictions to public advertisement of financial assets or services, which can only be made by financial institutions regulated by one of the regulators listed above. Accordingly, the commercialization of financial assets backed by cryptoassets in Peruvian territory is strictly prohibited for all entities that are not regulated by the SMV or the SBS.

Nonetheless, the Peruvian Parliament is currently discussing the approval of Bill No. 1042-2021-CR, "Framework Law for the Commercialization of Cryptoassets”, which could be enacted in the coming months despite the fact that the regulators of the Peruvian financial system and the Peruvian capital market have several objections to the Bill. The Bill was approved by the Economics, Banking and Financial Intelligence Commission, and is due to be included in Congress’ agenda for its approval.

2. Are the local regulators taking any steps to adopt or recognize this technology?

As aforementioned, the Superintendency of the Securities Market and the Superintendency of Banking, Insurance and Pension Fund Administrators issued statements declaring themselves as not competent authorities to regulate cryptocurrencies. In April 2024, the Central Bank (Banco Central de Reserva – “BCR”), launched a CBDC pilot program, targeting locations without widespread banking services access. This program is centered around the issue of a CBDC, cooperating with financial institutions that provide e-wallets, over the span of one year. 

Regarding cryptoassets, none of the aforementioned activities are regulated by Peruvian legislation.

N/A.

5. Can offshore business provide services to local customers on either active solicitation or reverse solicitation basis?

N/A.

Despite the lack of a specific regulation, the SMV, SBS, and Central Reserve Bank of Peru (Banco Central de Reserva – “BCRP”) have made statements regarding the topic of cryptoassets:

• The SMV has issued a statement addressing the risks of acquiring cryptoassets, considering the following: (i) companies that are currently offering or promoting cryptoassets are not under SMV supervision; (ii) the promotion and exchange of cryptoassets are usually linked to illicit activities; and (iii) according to Peruvian legislation, the advertisement of financial assets or services can only be carried out by companies supervised or authorised by the SMV or SBS.
• The SBS has issued multiple statements in response to Bill No. 1042-2021-CR, "Framework Law for the Commercialisation of Cryptoassets," in which it is established that if the law comes into force, the SBS will be the entity in charge of authorising and registering companies dedicated to the commercialisation of cryptocurrencies. In these statements, the SBS indicates that it will only be responsible for supervising entities that receive deposits from the public and those that, due to carrying out related or similar operations, are determined by law.
• Finally, the BCRP issued another statement establishing the differences between cryptoassets and money as a means of exchange, unit of account, and store of value.

As of 31 May 2024, there are new applicable compliance requirements for cryptoassets and/or cryptoassets providers, according to the Peruvian regulation.

In July, 2023, the Peruvian government published Supreme Decree No. 006-2023-JUS, which incorporates cryptoassets exchange domiciled or incorporated in Peru as new Virtual Asset Service Providers (Proveedores de Servicios de Activos Virtuales – “PSAV”) as entities obliged to report to the Financial Intelligence Unit (Unidad de Inteligencia Financiera – “UIF”).

The new PSAV covers any natural or legal entity, domiciled or incorporated in Peru, that is not covered by any other of the Recommendations of the International Financial Action Task Force (Recomendaciones del Grupo de Acción Financiera Internacional - "GAFI") and that, as a business, performs one or more of the following activities or operations for or on behalf of another natural or legal entity:

1. Exchange between virtual assets and fiat or legal tender currencies;
2. Exchange between one or more forms of virtual assets;
3. Transfer of virtual assets;
4. Custody and/or management of virtual assets or instruments that allow control over virtual assets; and
5. Participation in and provision of financial services related to the offer and/or sale of virtual asset by any issuer.

Consequently, those who carry out the aforementioned activities must implement an Anti-Money Laundering and Anti-Terrorism System (Sistema de Prevención de Lavado de Activos y Terrorismo - “SPLAFT”) in accordance with Law No. 27693, “Law of the Financial Intelligence Unit of Peru – UIF”, its amendments and its Regulation.

While the Peruvian Market has recently gained considerable interest regarding cryptoassets, there have been several attempts from the private sector in order to capitalize on such interest. Considering the above, some entities like Buda, Agente BTC and Buenbit, each function as a cryptocurrency exchange platform that allows the purchase, sale and storage of various types of cryptocurrencies in Peruvian territory. However, no local banking entity offers cryptoassets in Perú.

In February 2024, following SEC regional regulations, the Lima Stock Exchange started offering investors the possibility of investing in cryptocurrencies-based ETF through 19 brokerage firms. It is worth noting that these ETF investments do not involve transferring or selling cryptocurrencies.

There are no banking entities that operate with service providers related to cryptoassets in Peru. However, BBVA Bank offers cryptocurrencies to the Peruvian market through its subsidiary in Switzerland.

Considering that there is no regulatory framework applicable to cryptoassets, it is generally accepted that cryptoassets fall under the category of intangible movable assets, and considering such classification, any transfer, sale or donation of cryptoassets would be considered as a capital gain, which is taxed under the Peruvian Income Tax (IT) at a rate of 29.5% in cases where the transfer is performed by a Peruvian company.

In cases where the transfer is performed by an individual, such transfers would not be subject to the IT unless the individual performs the acquisition and sale of cryptoassets on a regular basis (habituality rule). In this scenario, it would be necessary to analyse, case by case, if the individual complies with the habituality rule.

The transfer of cryptoassets is not subject to the VAT in Peru since the Peruvian VAT law levies specific transactions, which do not include the transfer of intangible assets such as cryptoassets. The Financial Transactions Tax (FTT) would not be applicable either, since the cryptoassets are usually transferred through digital wallets, which are not managed by any Financial Institutions. However, if a cryptoasset is transferred in exchange for cash, it would be subject to the FTT if the money is wired to a local financial bank account of the transferor.

Peruvian legislation does not expressly prohibit the use of cryptoassets as a means of payment. Likewise, parties may agree to pay any service using cryptoassets. However, Law No. 28194 provides an exhaustive list of accepted payment methods, which does not include cryptocurrencies.

Each of the payment methods included in this law is used within a payment or securities settlement system that is expressly recognised by the law or declared as such by the BCRP or the SMV.

However, some companies or entities do not accept cryptocurrencies because they are not recognised by the Peruvian tax authority as an official means of payment under the aforementioned law.

In April 2024, the Central Bank (Banco Central de Reserva – “BCR”) issued and published Circular No. 0011-2024-BCRP, regarding "Regulation of Digital Money Innovation Pilots".

The regulation establishes the creation of digital money innovation pilots in the Central Bank. These pilots consist of programs aimed at creating the conditions to know and evaluate the performance of alternative models of digital money (CBDC) issued by the BCR, with emphasis on the evaluation of this impact in areas with a low level of banking penetration. BCR is aiming to facilitate transactions in low Internet coverage zones, as digital money is not Internet-based.

The regulation indicates that digital money (CBDC) is sovereign money in digital format, which constitutes issuer's debt and is kept in BCR accounts without interest. Likewise, it indicates that the BCR will be able to determine the guidelines related to user experience, commission collection, payment channels, fraud authentication, and interoperability, among other relevant indicators. It is established that interested institutions may request their participation in these pilot programs for a period of one year, with a duly justified one-year extension.

Among the duties of the participating entities are a) risk minimization measures, b) handling of fraud cases, c) liability for damages and losses suffered by end users, d) costs associated with the development of their activities, e) acts or omissions attributable to causing losses to BCR, f) design, obligations, and other approved provisions; and g) compliance with the provisions of the agreement with BCR.

Participating entities are expected to be selected before July 2024.

No, there have not been any relevant studies or initiatives related to the metaverse and its regulatory framework.