The commission seeks to test how decentralized ledger technologies can modernize the issuance, operation, and management of securities by implementing market rules and regulations as smart contract logic on the program’s underlying platforms.
Key Takeaways
- Brazil’s CVM launched Resolution 249 to test simulated tokenized stock trading on blockchain networks.
- The trial aims to map out cybersecurity risks and smart contract logic to draft future market regulations.
- B3 exchange is building a tokenized platform for 2027 to integrate digital assets with traditional markets.
Brazil Launches Experimental Tokenization Sandbox Program
Brazil is taking another step into tokenization, albeit at an experimental stage.
On Tuesday, the Comissão de Valores Mobiliários (CVM), Brazil’s securities watchdog, issued Resolution 249, launching an experimental program using decentralized ledger technologies to carry out tests involving the implementation of all securities operations on digital platforms.
The pilot will be carried out in a highly controlled environment where all operations will be simulated, meaning investors will operate using stocks and money created for this task only, without exposing real stocks to financial risks.
This program seeks to explore the feasibility of executing all securities operations on decentralized platforms, comparing the benefits and drawbacks of public and private blockchains for this use case. It will also examine the cybersecurity and operational risks of operating these securities on digital platforms, examining interoperability and network resilience issues, to document these experiences and use them to draft specific regulation.
Any blockchain network introduced to this pilot must transport market principles into smart contract logic, making all products compliant by default. Security operations should also be private, but each operation must be auditable by market regulators to ensure compliance. AI tools will also be implemented to assist in market monitoring tasks.
The move follows the establishment of a special tokenization working group in July, which will issue recommendations for developing a regulatory framework for tokenized securities.
Working proposals will only be received from organizations that are part of CVM’s tokenization working group, and will be overseen by a steering committee composed of members from this same group.
Otto Lobo, president of the CVM, declared that tokenization adoption is already well underway internationally. “Tokenization is already transforming capital market infrastructure and brings relevant opportunities to increase efficiency, innovation, and access to new business models,” he stated.
Private institutions in Brazil are also taking steps in the field of tokenization. B3, the country’s largest stock exchange, has announced that work on a parallel tokenization platform is well underway, targeting a launch in 2027 with an in-house-developed stablecoin. The initial system will not include 24/7 trading, but will merge digital and traditional liquidity pools to manage liquidity efficiently.