The Brazilian securities regulatory authorities, the Comissão de Valores Mobiliários (CVM), are working on introducing its second phase of the regulatory sandbox program, scheduled to go live by 2024. This project responds to the expanding interest in and growth in the global and Brazilian digital asset markets.
The announcement was delivered by Daniel Maeda, a superintendent of CVM, who emphasized the regulator’s recent success with tokenization. He highlighted that the regulator had successfully tokenized almost $36 million in assets, providing a solid foundation for additional research and experimentation in the tokenization industry.
The choice by Brazil to create a tokenization sandbox is in line with worldwide trends in financial innovation and blockchain technology. By taking this strategy, the financial sector is encouraged to innovate while regulators can comprehend the potential hazards and advantages of developing technologies.
This is happening at a time when the Brazilian central bank recently moved to tighten laws governing cryptocurrencies and other digital assets. In October, the central bank announced measures to strengthen monitoring and reporting requirements for cryptocurrency transactions.
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Daniel, while addressing the audience at the Rio Innovation Week on October 4th, underlined the necessity of cooperation between the securities regulator and the central bank. He emphasized the value of keeping up with changes in the world of digital assets and studying other nations’ regulatory policies.
Analyzing the development, Turner Wright, with Cointelegraph, says that Brazil has committed to adopting blockchain technology and digital assets as an essential component of the nation’s financial ecosystem, as seen by the intention to open a sandbox for tokenization in 2024.
CVM Superintendent Comments On The Development, Explains Reason For Project
Wright also added that regulators and market participants must cooperate to ensure responsible and sustainable growth in the digital asset sector as Brazil is ready to enter the tokenization world through its sandbox effort.
According to Daniel Maeda, the commission doesn’t intend to define a particular cause to succeed In this journey because they are working on letting innovation get to them without any form of limitation in the future. Daniel also said that the commission will be studying the regulatory sandbox to create a case study for the tokenization agenda, which is proposed for 2024.
Daniel also revealed that the idea behind the second phase of the sandbox is a result of the positive results from the successful tokenization of about $36 million in digital assets. He also added that the commission is presently waiting for the proposed changes to be made and linked to the Brazilian cryptocurrency market, as well as the central bank-controlled digital currency, “The Drex.”
However, through the tokenization agenda, investors can get more transparency in the whole transaction process, lower costs, and augment the democratization of their investments, which are common values upheld by the commission.