Peru’s Presidency Issues New Decree to Regulate Cryptocurrency Exchanges Amid Money Laundering Concerns
The Peruvian government has taken a significant step towards regulating the cryptocurrency market by issuing a new decree requiring all exchanges operating in the country to comply with anti-money laundering (AML) regulations. This move aims to address growing concerns over money laundering and terrorist financing associated with cryptocurrencies, as well as safeguard its financial system from illicit activities.
Key Requirements
Under the decree, virtual asset service providers are now required to:
- Report information to the Financial Intelligence Unit (UIF-Peru), responsible for detecting money laundering and terrorism financing activities
- Comply with the Financial Action Task Force’s (FATF) “travel rule,” which requires exchanges to implement Know Your Customer (KYC) standards by collecting and sharing customer data to enhance transparency and prevent illicit activities within the crypto space
Definition of Virtual Asset Service Providers
The decree includes entities engaged in various cryptocurrency-related activities, such as:
- Exchanging virtual assets for fiat currencies
- Transferring virtual assets
- Providing custody and administration of virtual assets
- Offering financial services related to the sale or offer of virtual assets
Controversy Surrounds the Decree
However, the new decree has not been without controversy. The Blockchain & DLT Association of Peru (ABPE), a community advocating for the adoption of bitcoin and blockchain technology, expressed dissatisfaction over being excluded from the drafting process and is urging Congress to initiate a dialogue with industry stakeholders to ensure all perspectives are considered.
Global Trend
Peru’s decision to tighten regulations reflects the global trend of governments seeking to balance innovation and financial system protection. As cryptocurrencies continue to gain traction worldwide, many countries are grappling with the challenges posed by their decentralized and pseudonymous nature. The decree represents a significant step forward in Peru’s efforts to combat financial crimes and protect its economy from potential risks associated with cryptocurrencies.
What’s Next?
It remains to be seen how these new regulations will shape the cryptocurrency landscape in Peru and how industry stakeholders will respond to the government’s call for increased compliance. As the Financial Intelligence Unit is expected to release more specific guidelines in the coming days, it will be interesting to see how this development unfolds.
Conclusion
The Peruvian government’s decision to regulate cryptocurrency exchanges demonstrates its commitment to addressing money laundering concerns and safeguarding its financial system. While controversy surrounds the decree, the move reflects a global trend of governments seeking to balance innovation and financial protection. Only time will tell how these new regulations will shape the future of cryptocurrencies in Peru.