Brazil Regulator Nears Final Ruling on Blockchain Infrastructure for Tokenized Securities

Brazil’s securities regulator, the Comissão de Valores Mobiliários (CVM), is poised to make a landmark decision on the future of its capital markets, currently reviewing a proposal that outlines the experimental regulatory regime for tokenized securities. The proposal, delivered by the internal Working Group on Tokenization (GTT) this month, is focused on creating rules for how Distributed Ledger Technology (DLT) will be used for the core functions of a financial market: custody, settlement, and registration of securities.

The ruling is critical because it will determine how quickly and securely existing Brazilian financial products—from debt instruments to real estate assets—can be moved onto blockchain infrastructure. For foreign investors, the decision lays the groundwork for a new, more efficient asset class with lower transactional costs and greater transparency. The GTT, which the CVM formally established in July 2026, was tasked with delivering this proposal within 60 days, setting the stage for the CVM board’s immediate review.

While the CVM, Brazil’s equivalent of the U.S. Securities and Exchange Commission, has previously established rules governing the assets themselves—such as those under CVM Resolution 88 (RCVM88) for tokenized offerings via crowdfunding—this new push is centered on the underlying market infrastructure, or the "plumbing". The regulator’s core objective is what officials call "optimized disintermediation," leveraging DLT’s transparency to remove unnecessary intermediaries that drive up the cost and complexity of the traditional Brazilian financial market.

A key part of this strategy is the potential to waive the requirement for a fiduciary agent in certain tokenization operations. By replacing this traditional third-party intermediary with DLT-based smart contracts for oversight and governance, the CVM aims to significantly reduce the cost of issuance and maintenance. This move aligns with the regulator’s stated goal to position Brazil as a competitive and modern tokenization hub, rather than merely reacting to foreign regulations, such as the U.S. SEC's recent steps toward allowing blockchain-based share registers.

The experimental regime will not immediately become law; instead, it is a precursor to a definitive set of rules. The GTT has a 120-day mandate, extendable by 30 days, to manage and evaluate the results of the regulatory experiments under the new framework. The next step for the CVM is the formal announcement of which market participants will be authorized to test the new DLT-based infrastructure, a decision expected to follow shortly after the current board review.

What it touches

The move to regulate the underlying settlement and custody infrastructure for tokenized securities directly impacts companies that provide technology services to the Brazilian capital market, including those specializing in Distributed Ledger Technology (DLT) and financial market infrastructure. For foreign investors, the successful implementation of this experimental regime is a prerequisite for a new class of assets that promises to increase the efficiency and potential liquidity of Brazilian-backed securities.