Brazil's securities regulator, the CVM, is pushing mandatory asset tokenization and AI-powered surveillance to modernize oversight of its fund industry. Its president says the fund market has outgrown traditional supervision methods. B3, the country's stock exchange, expects its tokenization platform to be ready by 2027.
Brazil's CVM, the country's equivalent of the U.S. SEC, is pushing asset tokenization as a key element of a market-structure overhaul that also relies on AI-powered surveillance. Otto Lobo, the CVM's president, said a mandatory move to tokenization is necessary because the growth of the fund industry has overwhelmed current supervision infrastructure.
A fund market too large for old oversight
Citing Valor Econômico, the source reports the fund industry has reached a net worth of $2.32 trillion with over 34,000 active structures. That scale makes traditional oversight methods obsolete, according to the report.
The CVM expects the modernization to add 1,200 new employees in the next few years. A Supreme Court decision now lets the regulator retain 70% of its inspection fee revenue, which makes the shift possible.
What decentralized ledgers would change
At a conference, Lobo said decentralized ledger technologies (DLTs) offer an edge over traditional methods. They enable immediate settlements, remove counterparty risk, keep a continuous audit trail and record the final beneficiaries of each transaction.
Lobo also said money laundering prevention would run at the asset level through smart contracts. That would simplify how regulators apply compliance and know-your-customer requirements.
The regulator has already started testing. According to Lobo: "We're already testing three DLTs, with the possibility of creating native digital assets".
Lower entry costs and the B3 platform
Lobo said the change would also benefit customers, with entry costs to money market funds as low as $20. He framed this as a way to open the market to new customers.
Meanwhile, B3 is advancing tokenization services that will run in parallel with traditional securities and share liquidity with them. The exchange expects the platform to be ready by 2027.
Source: Bitcoin News
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