Brazil’s securities regulator, Comissão de Valores Mobiliários (CVM), is set to initiate a second regulatory sandbox program in 2024, focusing on exploring use cases for tokenization. Daniel Maeda, the Superintendent of Institutional Investor Supervision at CVM, announced the plan during Rio Innovation Week on October 4. Maeda revealed that positive experiences with tokenizing approximately $36 million in assets prompted the regulator to launch the second sandbox.
Maeda emphasised that the CVM aims to facilitate innovation without predefined limitations, stating, “We do not define specific cases because we want to let innovation reach the CVM without prior limitations.” However, he mentioned that certain areas, such as agribusiness and Environmental, Social, and Governance (ESG), have caught their attention for potential tokenization applications.
The Superintendent noted that the CVM intends to wait for changes related to Brazil’s crypto market, including developments around the country’s central bank digital currency, the Drex. Maeda emphasised the importance of observing global regulatory approaches, citing the United States Securities and Exchange Commission (SEC) as a respected example.
Expressing the benefits perceived by the CVM in the digital asset market, Maeda highlighted the positive aspects of tokenization. He stated, “Through tokenization, the investor gains transparency and lower costs, in addition to increasing the democratisation of investments, which are values that the commission carries.”
In October, Brazil’s central bank announced tightened regulations in response to a surge in crypto adoption, with Governor Campos Neto linking crypto usage to potential tax evasion and illicit activities. Brazilian President Luiz Inácio Lula da Silva signed a framework into law in June, defining the central bank’s and CVM’s roles in regulating digital assets. Additionally, Brazil plans to launch a program in November, issuing identification documents through a private blockchain to enhance personal data protection and prevent fraud.
