Brazil CVM sets 60-day deadline for tokenized securities framework

Brazil’s securities regulator, the Comissão de Valores Mobiliários (CVM), has established a working group to draft an experimental framework for tokenized securities, with an initial proposal due within 60 days of the group's installation.

The initiative aims to establish clear rules for the registration, custody, trading, and settlement of securities using distributed ledger technology. A broader review will run for 120 days, with an option to extend by 30 days.

The regulatory push addresses a fundamental structural shift in financial infrastructure. Blockchains can consolidate functions traditionally handled by separate entities, such as exchanges, custodians, registrars, and clearing houses. This convergence creates significant ambiguity regarding who controls the official ownership record, how private keys are managed, when transactions can be reversed, and who bears liability during system failures.

For market participants, resolving these questions is critical as Brazil's real-world asset sector expands rapidly. According to data from local tracking platform RWA Monitor, the country's tokenized asset market has reached approximately 12 billion reais, equivalent to $2.34 billion. Debentures and commercial notes account for about $1.3 billion of that total.

The CVM is not starting from scratch. The regulator confirmed that its 2022 guidance remains in effect, meaning the use of blockchain does not alter whether an asset legally qualifies as a security. Instead, the new working group—comprising 14 internal departments—will focus strictly on the operational ecosystem surrounding these assets.

The group has the mandate to consult with government agencies, market associations, self-regulatory bodies, and external specialists. It will analyze cybersecurity risks, study international regulatory models, and evaluate the outcomes of previous blockchain-based issuance and secondary trading tests conducted in the CVM's regulatory sandbox.

This domestic rule-making aligns with a sharp uptick in global institutional interest. Global centralized exchange spot trading volumes climbed 15.3% to $1.11 trillion in June, marking the first increase in five months. More notably, perpetual volumes tied to real-world assets surged to a record $311 billion during the same period.

By establishing a dedicated legal framework, Brazil is attempting to standardize a market that has thus far operated on experimental terms. Bringing certainty to custody and liability could unlock further institutional capital and solidify the country's position in the tokenization of traditional finance.