Brazil's CVM has launched a task force to create a regulatory framework for tokenized securities, targeting key operational aspects within 60 days.
The Comissão de Valores Mobiliários (CVM), Brazil's securities regulator, has initiated a task force dedicated to developing a framework for tokenized securities, with a foundational proposal expected within the next 60 days.
This framework will address key areas such as official ownership documentation, private key management, transaction reversibility, and liability. The task force will analyze cybersecurity challenges, international regulatory practices, and insights from previous sandbox trials to inform its recommendations.
The group consists of 14 departments within the CVM and will consult with various stakeholders, including government entities and market associations. Following the initial proposal, a comprehensive evaluation phase could extend to 120 days, with a potential additional 30-day extension.
Currently, Brazil's market for real-world assets is valued at approximately 12 billion reais ($2.34 billion), with debentures and commercial notes comprising about $1.3 billion of that total. The CVM has previously conducted experiments with blockchain technology, emphasizing that the economic characteristics of a token determine its classification as a security.
This initiative aims to create a robust regulatory environment for the growing market of tokenized assets in Brazil, which has been steadily expanding. As the CVM explores the operational aspects of asset management on distributed ledgers, it seeks to clarify authority over ownership records and the management of private keys, alongside addressing potential transaction reversibility and liability issues.
