Brazilian Securities Commission preparing for tokenization sandbox for 2024
The Comisso de Valores Mobiliários (CVM), Brazil’s securities regulator, is drafting plans for a second regulatory sandbox program focused on cryptocurrencies and tokenization applications that will begin in 2024.
The project was announced by CVM Superintendent Daniel Maeda at a recent fintech conference. He said the organization hopes to build on lessons learned from its initial sandbox experiment, which saw over $36 million in assets tokenized. To avoid stifling innovation, Maeda claimed that CVM intentionally leaves the use cases undefined rather than defining them in advance. He did, however, mention that the agency has been particularly interested in tokenization prospects related to agribusiness and ESG measures.
Tokenization will be used by CVM to promote transparency, cut costs, democratize investing, and simplify processes—benefits consistent with the agency’s values. The intended debut in 2024 gives Brazil’s central bank time to first put the necessary regulations in place for digital assets, including its own digital currency. With a deeper comprehension of the crypto supervision ecosystem, CVM can then create its sandbox policies.
Maeda highlighted admiration for the careful progress made on cryptocurrency oversight by international agencies including the US SEC in their balanced approach. In order to preserve investors and market integrity, he highlighted that CVM’s goal is to promote responsible innovation. Contrary to more prohibitive positions from the Brazilian central bank and other authorities, CVM’s planned crypto-focused sandbox demonstrates the company’s sustained support for digital assets.
The securities regulator can now adopt a more progressive posture according to legislation that President Lula recently signed. It divides monitoring responsibilities between the central bank and CVM.
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