Brazil’s securities regulator, the Comissão de Valores Mobiliários (CVM), is developing plans for a second regulatory sandbox program set to launch in 2024, centred on cryptocurrency and tokenization applications.

CVM Superintendent Daniel Maeda revealed the project at a recent fintech conference, stating the agency aims to build on learnings from its first sandbox initiative that saw over $36 million in assets tokenized.

Maeda said CVM purposefully leaves the use cases open rather than predefining them so as not to limit innovation. However, he noted tokenization opportunities around agribusiness and ESG metrics have particularly caught the regulator’s attention.

CVM’s goal is to leverage tokenization to increase transparency, lower costs, democratize investing, and streamline processes—benefits aligned with the agency’s values.

The 2024 target launch timeframe allows Brazil’s central bank to first implement expected rules around digital assets, like its own central bank digital currency. CVM can then develop its sandbox policies with a fuller understanding of the crypto oversight landscape.

Maeda cited respect for the balanced approach taken by international regulators like the US SEC in moving cautiously on crypto oversight. He emphasized that CVM aims to foster responsible innovation that protects investors and market integrity.

The planned crypto-focused sandbox represents CVM’s continued embrace of digital assets, in contrast to more restrictive stances from Brazil’s central bank and other authorities.

President Lula recently signed legislation dividing oversight duties between the central bank and CVM, enabling the securities regulator to take a more progressive stance.

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