Brazil is taking another major step toward integrating blockchain technology into its traditional capital markets, with the country’s securities regulator launching a dedicated initiative to develop rules for tokenized securities and onchain financial markets.
The Brazilian Securities and Exchange Commission (CVM) has established a strategic working group tasked with studying, testing, and proposing regulations for securities issued, recorded, traded, or settled using distributed ledger and blockchain technology.
The initiative is expected to lay the groundwork for a broader regulatory framework covering tokenized securities in Brazil, including critical areas such as registration, custody, trading, settlement, cybersecurity, and investor protection.
CVM creates working group to study onchain securities
The CVM said the new working group will examine how securities tokenization can operate safely within Brazil’s existing capital market structure.
The group will study the full lifecycle of tokenized securities, including how digital assets representing regulated financial instruments are issued, registered, held in custody, transferred, traded, and settled.
Rather than immediately introducing permanent regulations, the CVM plans to first establish an experimental regulatory environment where new models can be evaluated before broader rules are implemented.
A proposal for this experimental regime is expected within the group’s first 60 days.
The working group itself is initially scheduled to operate for 120 days, with the possibility of a 30-day extension.
At the end of the process, it is expected to deliver a comprehensive report containing recommendations that could help shape Brazil’s future tokenization regulations.
Tokenization could transform Brazil’s capital markets
Tokenization involves representing ownership or economic rights to traditional assets through blockchain-based digital tokens.
In capital markets, this could include tokenized versions of securities such as bonds, investment products, receivables, fund interests, and other regulated financial instruments.
The technology could potentially make issuance and settlement more efficient while enabling greater automation through smart contracts.
Blockchain infrastructure may also allow different stages of a securities transaction, including ownership registration, transfer, settlement, and compliance, to operate through more integrated digital systems.
However, these efficiencies introduce new regulatory questions.
Authorities must determine how existing securities laws apply to blockchain-based instruments and establish appropriate standards for custody, cybersecurity, investor protection, market integrity, and operational resilience.
Working group will examine the entire tokenization ecosystem
The CVM’s initiative goes beyond simply determining whether a token qualifies as a security.
The working group is expected to conduct comparative studies of international regulatory approaches, analyze lessons from previous regulatory sandbox programs, and engage with financial institutions, technology companies, regulators, and other market participants.
It will also examine how decentralized technologies could affect the traditional structure of capital markets.
Cybersecurity will be another major area of focus.
As financial assets increasingly move onto blockchain infrastructure, regulators must consider risks involving smart-contract vulnerabilities, private-key management, digital custody, operational failures, and cyberattacks.
The CVM wants these considerations incorporated into any future regulatory framework.
Brazil’s tokenization market is growing rapidly
The regulatory initiative comes as tokenization activity expands across Brazil’s financial ecosystem.
The CVM previously estimated that tokenization-related volumes could surpass $740 million in 2025, reflecting growing interest in blockchain-based fundraising and investment structures.
Part of that growth has been supported by Brazil’s crowdfunding framework, which has enabled companies to experiment with digitally structured investment offerings under regulated conditions.
As adoption increases, regulators face pressure to move beyond isolated experiments and establish clearer rules capable of supporting larger-scale institutional participation.
A formal tokenization framework could provide greater legal certainty for banks, fintech companies, asset managers, exchanges, infrastructure providers, and blockchain companies seeking to develop tokenized financial products.
CVM sees tokenization as a structural market shift
CVM President Otto Lobo described tokenization as a potentially structural transformation of the capital market rather than simply another technological trend.
The regulator’s approach suggests Brazil intends to explore how blockchain can be integrated into existing financial infrastructure while maintaining regulatory safeguards.
Instead of creating rules solely around the technology itself, the CVM appears focused on understanding how tokenization changes the functions traditionally performed by exchanges, custodians, settlement systems, registrars, and other financial intermediaries.
This could become particularly important as blockchain enables some of these functions to become more automated or interconnected.
Experimental regime could shape future regulation
The first major milestone will come within 60 days, when the working group is expected to present its proposal for an experimental regulatory regime.
Such a framework could allow regulators and market participants to test tokenized securities models under controlled conditions before permanent regulations are introduced.
The results could help the CVM determine how existing securities regulations should be adapted and where entirely new rules may be required.
After completing its broader 120-day mandate, the group is expected to issue final regulatory recommendations.
Brazil’s move reflects a wider global trend as financial regulators explore how real-world asset tokenization and blockchain-based securities infrastructure can coexist with established capital market rules.
If successful, the initiative could position Brazil as one of Latin America’s more advanced markets for regulated tokenized securities, creating a clearer bridge between traditional capital markets and onchain financial infrastructure.
