Author: Turner Wright, Cointelegraph; Translation: Song Xue, LianGuai
The Brazilian Securities and Exchange Commission (CVM) plans to launch its second regulatory sandbox program in 2024.
Daniel Maeda, the head of CVM’s institutional investor regulation, announced during the Rio Innovation Week on October 4th that the regulatory agency will explore the possibility of a tokenization use case regulatory sandbox starting in 2024. Maeda stated that the decision to launch the second sandbox program was made after positive experiences with tokenizing approximately $36 million in assets.
Maeda said, “We will not define specific use cases because we want to allow innovation to reach the Brazilian Securities and Exchange Commission without previous restrictions. However, there are indeed some tokenization application areas that have caught our attention, such as agriculture and environment, and the social and governance (ESG) sector.”
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The head of the regulatory agency also stated that CVM intends to wait for changes related to the Brazilian crypto market to be implemented, including changes related to the country’s central bank digital currency, Drex. According to Maeda, both the securities regulatory agency and the central bank should consider the development of digital assets and how other countries handle regulation.
“I have a lot of respect for the [U.S. Securities and Exchange Commission], and I don’t think it’s my place to say whether their position is right or wrong,” Maeda said. “What I can say is that CVM sees many benefits in utilizing the process in this market. Through tokenization, investors can not only increase the democratization of investments but also enhance transparency and reduce costs, which are values that the commission upholds.”
With the significant increase in cryptocurrency adoption in the country, the Brazilian central bank announced tighter regulations in October. Governor Campos Neto specifically highlighted the connection between using cryptocurrencies and tax evasion or illegal activities.
In June, Brazilian President Luiz Inácio Lula da Silva signed a legal framework that defines the different roles of the country’s central bank and CVM in regulating digital assets. In November, Brazil plans to launch a program to issue identification documents through private blockchain as part of efforts to protect personal data and prevent fraud.
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