Asset tokenization is a digital revolution that is reaching all market sectors, in Brazil and around the world, simplifying business and helping to increase liquidity and profitability.

Like all transformations, especially digital ones, it is natural that business tokens are the source of many doubts for companies and investors. The fact that the token is a digital asset that is created in the same environment as cryptocurrencies – the blockchain – raises questions.

After all, digital currencies were born as a decentralized means of payment and nowadays, they have become investment assets highly exposed to speculative bubbles and risk. Naturally, the tokens end up associated with the same behavior, which is not true.

The difference between tokens and cryptocurrencies is already known, but the regulation of tokenization is essential to increase the security of those who want to tokenize and those who want to buy tokens.

What stage is the regulation of the crypto market at?

BLOCKBR, a native web 3.0 company, will talk about the processes of regulating transactional tokens!

IS TOKENIZATION ILLEGAL WITHOUT REGULATION?

Not.

Investment tokens and business tokens are legal, as the Brazilian legal system has a legal structure to judge litigation, irregular transactions and token fraud, as occurs with crowdfunding operations, for example.

The Civil Code governs relations between tokenization agents and the market. The creation, by CVM, of a regulatory sandbox for tokenization demonstrates that the public power considers that the token is legal.

The tokenization regulation aims to define clear rules for making tokens available and trading, which must be followed by all cryptomarket participants.

WHO REGULATES TOKENIZATION IN BRAZIL

The body responsible for regulating business tokens in Brazil is the Central Bank, which has been acting consistently on the importance of tokenization to leverage companies from the most varied niches.

There have been several BC actions in recent years aimed at validating and disseminating knowledge of how transactional tokens work, what mechanisms for regulating and preventing illicit activities should exist.

These precautions are common to all new business models and new investment methods. The focus is, above all, that the market for tokenized goods is:

• Transparent in the relationships between agents – issuers, investors and consumers and tokenizing companies;
• Supported by a comprehensive and protective legal framework;
• Moved by accredited agents.

In this way, token issuers and tokenists (investors) will have full security.

CVM ALSO PARTICIPATES IN THE REGULATION OF TOKENS

Another essential body in the process of specifically regulating security tokens is the CVM – the entity responsible for regulating the registration of issuers, intermediation, bookkeeping, custody, settlement and other activities related to securities.

Security tokens are those that the CVM regulates directly – shares, debentures, guarantees and other securities.

On the other hand, there is a recent determination by the CVM aimed at categorizing tokens of receivables as a security, which makes them subject to the regulation of the agency.

WHAT IS THE ROLE OF REGULATION

Market regulation aims to ensure legal certainty, equity, efficiency and protection of the rights of all actors in a given sector of the economy. In common, they all have some premises that must be met.

PROTECTION OF CONSUMERS’ WELL-BEING

Ensure legal security, social security, health and well-being of the consumer public, creating standards that must be met with products and services. In tokenization, some aspects are truthful information and a secure vehicle for token offerings.

How to earn passive income with tokenization?

PROTECTION OF CONSUMER RIGHTS

Regulation should protect consumer rights, with access to unambiguous data on investment and return, easy access to complaint and problem resolution channels, and methods of protection against unfair or misleading commercial practices.

PROMOTION OF FAIR COMPETITION

Regulation should promote ensuring a fair business environment and preventing monopolies, abusive pricing and anti-competitive practices.

MARKET INTEGRITY GUARANTEE

This is a fundamental aspect of market regulation; establish the rules for financial institutions, protect investors and promote transparency in financial transactions.

BACEN and CVM pay special attention to this issue because the cryptomarket is very young, it is necessary to create conditions for tax compliance and management of token project companies with the aim of strengthening transaction security and investor confidence.

HOW IS THE PROCESS FOR REGULATING TOKENIZATION

Tokenization is a business model that is here to stay, in continuous growth around the world and especially in Brazil, which is considered a model when it comes to tokenization.

There is a favorable environment in our economy for technological innovations, proven by the success of the PIX and the advances towards the creation of the digital real, expected for 2024.

The Brazilian digital currency – which in practice is a monetary token – is the unequivocal sign that we will advance in the integration of tokens into the Brazilian economy and an important green light for the regulation of tokens.

In addition to these factors, the development of tokenization in Brazil will also go through two important fronts.

REGULATORY SANDBOX

The regulatory sandbox is an experimental environment created by the CVM for companies from different areas to develop technologically innovative projects for the capital market.

In 2019, projects with tokens for securities, digital bookkeeping and other purposes were authorized. CVM monitors and evaluates the results and the developers.

It is understood that the tokenization sandbox will be an important gauge of what must be done to regulate tokens – it is no longer a matter of regulating or not, but when to regulate.

TOKENIZATION STUDY GROUP

BACEN created the GTI Tokenização, a study group on financial assets in blockchain environments – registration, custody, trading and settlement – with an advisory profile for:

• Propose recommendations and analyze the changes compared to the international reality;
• Understand the security level of tokenization;
• Evaluate the possible gains and risks for the SFN (national financial system).

The GTI will be a driving force behind the regulation of business tokens, as it will cover everything about crypto assets and form the necessary knowledge base for this.

INVEST AND PROFIT MORE WITH TOKENS ON BLOCKBR!

Do you think buying token is complicated? Believe me: applying to tokens is much simpler than you might think!

You will only need to open an account at an asset token broker like BLOCKBR and create a digital wallet to store your investments.

After that, access our token marketplace, learn about the many offers and choose those that align with your investor profile. You will find a variety of assets and possibilities for big gains and you can start investing in tokens with 50 reais!

BLOCKBR Digital Assets is a native fintech web 3.0 that brings technological innovation and digital knowledge to transform physical assets into digital ones, in the tokenization process.

The supply of tokenized assets is democratic and decentralized, which makes the way of investing safe, simpler and more efficient.

We enable, structure, issue and offer tokens on our platform and beyond. Be aware that tokens depend on feasibility and regulatory factors.

Do you want to tokenize your business or part of it? Do you have a business solution and does it make sense to issue your own token ?