Brazil Launches DLT-Based Securities Tokenization Pilot Program

Brazil's financial authorities are advancing a pilot program utilizing Distributed Ledger Technology (DLT) for securities tokenization. The initiative aims to assess the feasibility of applying DLT across all capital market activities—from security issuance through trading, custody, and settlement—before informing regulatory improvements.

According to Brazil's Securities Commission (CVM), the Tokenization Working Group (GTT) recently submitted a draft resolution outlining operational plans for the DLT pilot program to its board for approval. The program will test securities issuance, public offerings, distribution, trading, ledger management, custody, central depository, and settlement processes through simulated transactions without involving actual securities or investors.

Potential trial instruments include stocks, corporate bonds, asset-backed securities, and fund shares, with additional investment products like collective investment contracts also eligible for testing as needed. The program will run for 60 days, extendable by up to 30 days if technical issues require further validation. CVM plans direct access to the selected DLT network to monitor transaction records in real time.

Bruno Gomes, CVM's Securities Tokenization and Agricultural Finance Supervisor, stated that diverse market participant input was gathered to avoid restricting the trial scope to specific technologies, emphasizing a design that won't hinder future technological innovation.