“Everything in Brazil needs banks to succeed,” says CVM president on tokenization

“Everything in Brazil needs banks to succeed,” says CVM president on tokenization

On Thursday, the 3rd, during the opening of the Token Summit Brasil, promoted by Liqi, VBSO Advogados and Oliveira Trust, with support from ABcripto and ABfintechs, CVM Chairman Otto Lobo stated that the regulatory agency is creating a new market infrastructure through tokenization.

According to the CVM chairman, the consolidation of tokenization and the new capital markets infrastructure necessarily depends on the engagement of major traditional financial institutions. Taking a pragmatic tone during the event, Otto Lobo emphasized that ongoing dialogue with industry giants — specifically mentioning discussions with executives from Bradesco, Itaú and Santander — is a decisive factor in ensuring that the project gains the necessary traction.

“Everything in Brazil needs banks to succeed,” the head of the regulatory agency stated emphatically.

To illustrate the importance of the banking sector in validating regulatory innovations, Lobo drew a parallel with the Judicial Reorganization and Bankruptcy Law (Law No. 11,101/2005). According to him, the legislation took time to gain traction and deliver practical results in its early days, but the situation changed dramatically when banks began to play an active role in the ecosystem, introducing strict governance rules and providing the financing facilities that enabled projects to move forward.

In the current landscape of financial digitalization, the agency once again sees banking institutions as the main driving force behind this mechanism. Rather than dictating how the market will operate in the token era, the CVM positions itself as a “regulatory enzyme.” Its goal is to accelerate the process while ensuring a secure institutional environment in which banks and market participants can develop the business models that will shape the country’s future.

During his speech, Lobo highlighted that the Brazilian Securities and Exchange Commission (CVM) is experiencing a historic period of financial and technological restructuring, driven by recent court decisions and the urgent need to keep pace with global financial digitalization. The agency is preparing to move away from the traditional regulatory sandbox concept, now focusing on the immediate implementation of artificial intelligence-based systems and simultaneous trading models.

One of the central points of the chairman’s remarks was the transition from the testing model previously adopted by the agency to what he called “experimental regulatory periods.” This paradigm shift aims to accelerate the integration of token and blockchain technology into Brazil’s capital markets.

“This is an experimental regulatory period; in fact, we are no longer in the sandbox phase, especially since the rest of the world has already moved beyond that stage. […] The CVM can no longer operate as it has in the past. We can no longer supervise such a complex market, with the growth we have experienced, without evolving,” Lobo stated.

CVM: New Infrastructure Rails

To enable this evolution, a Working Group (WG) was established just over 30 days ago, led by Superintendents Vasco and Bruno. According to Lobo, the CVM’s strategy is to operate using two parallel tracks:

• The “combustion-engine vehicle”: The traditional, well-established infrastructure led by market participants such as B3, which will continue to operate efficiently for conventional transactions.
• The tokenized market: A new layer specifically designed for the issuance, trading and testing of digital assets, with enhanced supervisory capabilities and alignment with global technologies.

“These two tracks will operate in parallel and continue to function side by side. In practice, this new infrastructure, designed to test the issuance and trading of digital assets, is our response to this transformation,” he added.

Modernizing market infrastructure also requires a revolution in the way the CVM monitors transactions. Lobo stressed the urgency of adopting public policies focused on Artificial Intelligence (AI), citing recent discussions with regulatory authorities and technology industry players in the United States, including the SEC, the CFTC and Nasdaq.

He described the unchecked advancement of unregulated algorithms as an imminent risk, emphasizing that the agency is proactively addressing the issue through technology.

System Oversight

The first major deliverable of this new phase will be the implementation of an automated surveillance system built on a cloud-based Data Lake. All available market data will be directed to this environment and processed by AI in real time.

“There is no longer any way to supervise the Brazilian market without making a change that is not a revolution, but rather an evolution of the market,” he emphasized.

The feasibility of this entire technological modernization effort is tied to a recent budgetary achievement. A decision by Brazil’s Federal Supreme Court (STF), issued in a Direct Action of Unconstitutionality (ADI), granted the agency the right to retain 70% of the supervisory fees it collects.

According to Otto Lobo, this ruling provides for an estimated budget of R$138 million for next year. The funds will support not only the necessary technological investments but also the correction of longstanding structural shortcomings and improvements in employee compensation and benefits.

“Indeed, we have an order from the Federal Supreme Court (STF). This order requires the CVM to be strengthened, which includes correcting something truly absurd: in the CVM’s 49 years of existence, we have never had a health insurance plan. […] We have already held the necessary discussions, the funds have been secured, and this is a matter of dignity,” he revealed.

Brazil as a Leading Player and Next Steps

The CVM chairman concluded his remarks by reinforcing the importance of the Brazilian market on the international stage. According to him, U.S. regulators view Brazil as the leading driver of financial innovation in Latin America, serving as a showcase for countries such as Chile and Argentina.

Local financial institutions have also expressed this sense of urgency. Lobo referred to discussions with executives from major banks, including Bradesco, whose representatives have indicated that their processes have already been mapped out and are ready to “accelerate as much as possible.”

To consolidate these guidelines, the CVM will hold a formal presentation to the market on September 18, led by Lobo and Director Igor, while also awaiting the arrival of the new director, Bervani, to join the Board.

“It is not the CVM’s role to tell the market where the new business model will emerge. […] What the CVM is doing, however, is bringing forward an essential debate while maintaining its customary collaborative approach. We need to accelerate as much as possible, as global competition among exchanges is already a reality,” he concluded.