Outside Source
Brazilian regulators are stepping up their efforts to control the crypto sector – and will look into ways to police the issuance of tokenized assets.
Per Globo, Brazil’s Central Bank has “published a resolution” that creates an “interdepartmental working group” focused on tokenization. This group will “eventually propose regulatory amendments” pertaining to the “registration, custody, trading and settlement activities of financial assets that use blockchain-powered technology.”
The bank told the media outlet that its group would not seek to claw power away from the markets regulator, the Securities and Exchange Commission (known locally as the CVM). The CVM was previously keen to pursue a laissez-faire attitude to crypto regulation. But in recent months, it has reversed this policy – and instead wants to start policing the sector.
The new group will meet every 15 days, with the “possibility of calling extraordinary meetings” over the next six months. But it will be allowed to continue its meetings until the end of 2023 if it feels this is necessary.
When it completes its meetings program, the group will prepare a “final report.” This report will be presented to the bank’s Governance, Risks, and Controls Committee.
Why Is the Brazilian Central Bank Keen on Tokenization Regulations?
A growing number of domestic players are keen to begin tokenization-powered business operations. These include real estate developers and vendors – with tokenized real estate-related firms now making their presence felt around the Portuguese- and Spanish-speaking world.
Some companies are also exploring the option of offering tokenized loans.
However, most companies have been stymied by what the media outlet termed “regulatory obstacles.” These have mainly come in the form of confusion about which exact type of tokenized assets fit the CVM’s definition of a security. Under Brazilian law, all securities are regulated by the CVM.
The bank claimed that it had reached an “agreement” with the CVM on crypto and tokenization-related matters.
A spokesperson was quoted as stating:
“As the [discussion on this matter] progresses, cooperation on tokenization-related matters between [the Central Bank and the CVM] may be further deepened.”
This article first appeared at Cryptonews
