Brazil's Central Bank has acknowledged that tokenized financial assets still lack a complete regulatory framework. Mardilson Queiroz, head of the central bank's regulation department, discussed the issue during a panel at Febraban Tech in Sao Paulo. He said rules for virtual asset service providers should not be confused with the pending rules for tokenized financial instruments.
A Missing Regulatory Layer
Queiroz noted that the central bank has already regulated virtual asset service providers, but a second stage covering financial asset tokenization remains unfinished. He cited bank deposit certificates, bank credit notes, and trade receivables as examples that still require regulatory definitions. The virtual assets law works by exclusion, meaning tokens that represent regulated assets or securities are not treated as virtual assets.
Not all assets will follow the same approach, according to Queiroz. Some instruments can originate directly on distributed ledger technology networks, while others depend on commercial processes outside the digital infrastructure. A bank deposit certificate could be issued in tokenized form if the regulator recognizes a distributed ledger platform as an authorized depositary, but trade receivables are more complex because negotiations occur outside the network.
Coordination Between Regulators
The regulatory work also involves dividing responsibilities between the central bank and the securities regulator, known as CVM. Virtual assets fall under central bank oversight, securities are the responsibility of CVM, and real estate tokenization may cross both mandates. Queiroz said the two bodies cooperate through existing agreements and working groups to reduce the risk of overlapping standards.
Queiroz admitted that distributed ledger technology can make distinctions ambiguous, but both regulators want to avoid legal uncertainty. He noted that the central bank participates in a CVM working group on tokenization and that interpretations are being aligned. He cautioned that if every tokenized asset were treated as a security, the entire market would be regulated as securities, which even CVM does not want.
Market Concerns and Legal Stability
Julia Rosin, president of the Brazilian Cryptoeconomy Association, known as ABcripto, warned that tokenization could create a second registration layer if traditional records and digital ledger representations are not properly connected. She said this duplication raises costs and reduces the efficiency gains the market expects. Regulation must ensure that the two layers communicate, according to Rosin.
Bruno Balduccini, a partner at Pinheiro Neto Advogados, argued that tokenization should not change the nature of the underlying asset. A tokenized share remains a share, and a tokenized trade receivable remains a trade receivable, he explained. He warned that any additional classification by CVM could create legal uncertainty and push large financial institutions away from the market.
Practical Use and Market Trust
Balduccini also said regulation must provide legal security without adding layers of bureaucracy that erase the promised efficiency. He argued that if a new rule creates extra cost, it would remove much of the benefit tokenization should offer. His concern was illustrated by an agricultural example in which a soybean receivable was divided into tokens and used for smaller purchases, such as coffee or agricultural machinery.
Alvaro Loureiro, senior compliance leader at Santander Brasil, said the technology no longer needs to be proven and that the priority is to build trust for scale. He cited governance, anti-money laundering controls, custody, and investor protection as essential pillars. Julia Rosin added that risks are mostly linked to the quality of participants, custody, asset segregation, and underlying collateral rather than blockchain itself.
Brazil is moving toward a clearer framework for tokenized financial assets, but important choices remain about how to avoid overlapping rules and unnecessary costs. The central bank and the securities regulator are working to align their responsibilities while market participants call for legal certainty and efficiency. Over the next twelve months, the debate is expected to define which participants remain and which products can be offered, with trust and investor protection as central priorities.
Source: Exame