Brazil’s securities regulator sets up task force with 60-day deadline for tokenization proposal

Brazil’s securities regulator, the Comissão de Valores Mobiliários (CVM), has established a working group tasked with drafting an experimental regulatory framework specifically for tokenized securities. This newly formed group is expected to submit a primary proposal to the CVM board within 60 days of its official formation, with a more comprehensive review planned to last 120 days, plus an optional 30-day extension. The framework will address how securities registration, custody, trading, and settlement operate using distributed ledger technology.

The working group includes representatives from 14 different CVM departments and may seek input from government agencies, market associations, self-regulatory organizations, and external experts. The group will also examine cybersecurity risks, study international regulatory approaches, and analyze outcomes from previous blockchain sandbox experiments conducted by the CVM. Although Brazil’s current securities law already applies based on the economic characteristics of tokens, the regulator’s 2022 guidance clarified that the use of blockchain technology itself does not change whether an asset is considered a security.

A key focus of the framework will be on operational questions arising from the combination of functions traditionally handled by separate entities—such as exchanges, custodians, registrars, depositories, and settlement systems—within blockchain infrastructure. This consolidation raises issues about which party controls the official ownership records, how private keys are managed, the conditions under which transactions may be reversed, and the assignment of liability if these systems fail.

The announcement comes as Brazil’s market for tokenized real-world assets continues to expand, with data from the RWA Monitor tracking platform indicating that this market is valued at approximately 12 billion reais (about $2.34 billion). Debentures and commercial notes account for around $1.3 billion of that total. The CVM’s previous blockchain-related sandbox initiatives, which tested issuance and secondary trading on distributed ledgers, will inform the working group’s efforts to craft a broader regulatory framework for digital securities.