Brazil’s CVM Launches Task Force to Draft Tokenized Securities Rules

Brazil’s securities regulator has formally launched a task force to develop a regulatory framework for tokenized securities.

CoinDesk reported on July 20 that the Brazilian Securities and Exchange Commission, or CVM, set up a task force made up of 14 internal departments. The group will prepare a draft experimental regulatory framework covering the registration, custody, trading and settlement of tokenized securities using distributed ledger technology, or DLT.

The task force must submit its first draft to the CVM board within 60 days of its launch. The draft will then undergo a broad review lasting 120 days, with a possible 30-day extension if needed. The task force may also consult government agencies, market associations, self-regulatory bodies and outside experts.

The review is focused not on tokenized assets themselves, but on the infrastructure around them. Blockchain can combine functions traditionally handled separately by exchanges, custodians, registrars, depositories and settlement systems. That creates new regulatory questions, including who maintains the official record of ownership, how private keys are held, whether transactions can be reversed and who bears responsibility when systems fail.

Brazil’s tokenized asset market is growing rapidly. According to RWA Monitor, a Brazilian platform that tracks real-world assets, the market is worth about 12 billion reais, or about $2.34 billion. Corporate bonds and commercial paper make up roughly $1.3 billion of that total.

The CVM said in 2022 guidance that the use of blockchain technology does not determine whether an asset qualifies as a security. As part of the review, the task force will also examine the results of blockchain-based issuance and distribution experiments conducted through the CVM’s regulatory sandbox.