Peru’s Congress this week introduced the Bill No. 1042/2021-CR. titled Cryptoasset Marketing Framework, this will be the first attempt by another latin american country to create a legal framework for cryptocurrencies.
The measure is authored by deputy José Luis Elias Avalos, who sent the bill to Congress in December. However, it is only in early January that the law will finally pass through its first political steps in Peru.
Law defines concepts and legal support
Similar to PL 2303/2015 in progress in Brazil, the Peruvian project defines several key concepts in the world of cryptocurrencies. Among them are crypto assets, virtual asset service providers (VASP), blockchain and cryptocurrencies, for example.
VASPs are, in effect, companies that offer cryptocurrency services, such as exchanges. The law proposes that these companies must have a public registry that is open to all Peruvians. In this way, citizens can check if the platform is authorized to operate in the country.
Accordingly, each VASP will need an authorization to provide its services in Peru. The law also sets out the requirements that companies must follow to legally operate in the country.
Despite regulating cryptocurrencies, the bill does not intend to make them legal tender in Peru. One of the law’s articles highlights this by forcing companies to specify, in their service contract, that Peru does not consider cryptocurrencies as currency.
Cryptocurrencies in the share capital of companies
The law also opens a legal loophole for cryptocurrencies to be incorporated into the share capital of companies, a measure that also exists in Brazilian legislation. It also provides a legal basis for these companies to maintain cryptocurrencies in Peru.
In the first case, the proposal states that the value of cryptocurrencies must be registered at the time of incorporation of the company. The quotation must be made based on the registration date.
To have cryptocurrencies as part of their cash, companies must consider them as inventory assets. In other words, the law establishes that they will be classified as intangible assets. This difference will establish how they will be taxed in case of sale, for example.
The law still needs to be reviewed by the country’s Congress, which, unlike Brazil, has only one Chamber. Peru joins Brazil, Paraguay, Venezuela and El Salvador, Latin American countries that have created or are in the process of approving the regulation of cryptocurrencies.