Peru regulator: Digital currency oversight is a priority

The head of Peru’s Financial Intelligence Unit (UIF) has revealed that regulating the digital currency industry is a priority for regulators in the country. The UIF has been studying the industry in the past few months and seeks to use its findings to formulate regulations for digital currencies.

UIF superintendent Sergio Espinosa revealed the agency’s recent focus on digital currencies while speaking at the International Congress on Compliance and Anti-Corruption. Despite the pandemic, the UIF has continued in its efforts studying the industry, he stated.

“One of the areas we have not stopped on is the study on the presence and scope of the so-called virtual assets in Peru. […] there’s a need to regulate the industry,” Espinosa stated, as local outlet Gestion reported.

The regulator emphasized the need to fully understand the industry before formulating any form of regulations. At the moment, Peruvian regulators know very little about the industry, and this hinders their ability to adequately police it.

Espinosa commented, “The first need is to know the sector, especially what is happening in Peru in terms of virtual assets, such as if they are accepted and what businesses accept it, among other key aspects. A deeper knowledge is required to fully regulate it.”

The UIF has also been studying local digital currency exchanges since August, Espinosa stated. In September, the regulator widened the scope of its study on exchanges, he revealed. The research will take between 19 and 22 days “from the preparation of the notification documents to the issuance of the final report on the results of the same.”

In 2018, Peru announced that it intended to issue a CBDC, known as PeruCoin. The Peruvian government intended to peg the CBDC’s value at $10. Since then, not much has happened in the development of the PeruCoin. Other South American countries have since then overtaken Peru in their CBDC pursuit, with the Bahamas being the outright leader.

If the UIF implements a legal framework for the digital currency industry, it will put Peru in a prime position to be the digital currency hub in South America. The region has seen great adoption of digital currencies in countries such as Brazil, Argentina, Venezuela and Colombia. However, none of these countries have issued comprehensive digital currency regulations.

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