Brazil’s securities regulator has launched a dedicated working group to develop an experimental regulatory framework for tokenized securities, giving the team 60 days to submit its first proposal. The initiative will examine how blockchain technology can be used for issuing, trading, settling and safeguarding securities while addressing legal, operational and cybersecurity challenges. The move reflects Brazil’s continued efforts to support financial innovation as its tokenized asset market continues to expand.
The Comissão de Valores Mobiliários (CVM), Brazil’s securities regulator, said the working group will include representatives from 14 departments across the organisation. It will also consult government agencies, industry associations, self-regulatory organisations and external experts while preparing its recommendations.
The proposed framework will focus on how securities function throughout their lifecycle on distributed ledger technology (DLT). Areas under review include registration, custody, trading and settlement of tokenized securities, along with cybersecurity risks and lessons learned from international regulatory models.
The CVM has given the working group 60 days to present its initial proposal to the regulator’s board. A broader review will continue for 120 days, with the possibility of a further 30-day extension if additional work is required.
Source: gov.br
Brazil already applies securities regulations based on the economic characteristics of an asset rather than the technology used to issue it. Guidance issued by the regulator in 2022 clarified that using blockchain does not automatically change whether a digital asset qualifies as a security.
The latest review instead focuses on the infrastructure surrounding tokenized assets. Since blockchain networks can combine the roles traditionally performed by exchanges, custodians, registrars and settlement systems, regulators are examining questions around ownership records, private key management, transaction reversals and legal responsibility when systems fail.
Brazil’s tokenized asset market has grown steadily in recent years. According to RWA Monitor, tokenized real-world assets in the country are now valued at around 12 billion Brazilian reais, or roughly $2.34 billion, with debentures and commercial notes accounting for about $1.3 billion of that total.
The CVM has already tested blockchain-based issuance and secondary trading through its regulatory sandbox programme. The new working group will build on those findings as Brazil explores a broader legal framework for tokenized securities, reinforcing its position as one of Latin America’s most active markets for blockchain-based financial innovation.
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