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Central Bank of Peru Warns of Sol Digital Token as it Plans to Issue a CBDC

  • The issuing institute said that it has no link with the digital Sun and warned that it contravenes the laws of the country.
  • However, the government is working on issuing its own central bank currency.

The Central Reserve Bank of Peru denied any link to the “Sol Digital” token and called on the public to be careful with this digital currency, as it is not regulated. The clarification was issued by the financial body through a statement published on November 24.

"The denomination of the Sol corresponds only to the monetary unit issued exclusively by the Central Reserve Bank of Peru," 

said the issuer.

"Any use of this denomination for digital currencies issued by third parties affects the powers of the Central Bank and contravenes the legal framework applicable to the issuance of notes and coins," 

added the bank.

The monetary authorities reported that the Digital Sun is not an official currency and does not have the backing of the central bank either. In this sense, they also warned through the official Twitter account of the possible risks involved in acquiring this private cryptocurrency.

In the statement, the financial body highlighted that cryptocurrencies are not regulated in Peru. Therefore, they are not under the control or supervision of the Peruvian regulator, while warning about the risks of investing in crypto assets due to their volatility.

El Sol Digital was created by Anclap, a financial services company that has operated in the country since 2017. The company “is focused on developing an open and global digital payment network, connecting the financial systems of Latin American countries with the world. through the Stellar Blockchain ”, as stated on its website.

The bank warned the public about the risks involved in acquiring the digital token. It is an interoperable stablecoin backed by the local currency. The company has said that the Digital Sun is used to receive or make payments without additional costs.

Funds are instantly available to be withdrawn from a traditional bank account whenever the user wishes.

The token can be purchased on local exchanges such as lobstr.co and solarwallet.io and exchanged for common fiat currencies such as the US dollar, the euro, the Argentine peso, and the Brazilian real.

On the Flipside

  • Despite not admitting cryptocurrencies or the Digital Sol, the Central Bank of Peru is interested in issuing its own digital currency (CBDC). This was confirmed by the president of the issuing institute, Julio Velarde.
«The payment system that we are going to have in the world 8 or 10 years from now is going to be completely different from the current one. We have been working on a digital currency, "

said Velarde, according to the website criptonoticias.com.

Why You Should Care

  • Peru is ranked eleventh in Statista’s ranking of the countries that use cryptocurrencies the most in the world.
  • In the CBDC development project, the Central Bank of Peru is working in conjunction with financial institutions in Hong Kong and Singapore.

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