In times of asset tokenization, the Brazilian financial investment market is renewed based on good news emerging from the various actors in this ecosystem. One of them is CVM resolution 88 with a series of changes to the corporate crowdfunding environment.
This new regulatory instrument from the Securities and Exchange Commission represents a turning point for equity crowdfunding in Brazil, with changes that allow for the healthy expansion of the market with important flexibility, without giving up investor protection.
The set of changes will gradually impact the market and favor the tokenization of business projects, due to their profile similarities.
But in what aspects does this normative instruction impact the world of crowdfunding?
How can the token market benefit from these changes?
BLOCKBR, a company that develops tokenization infrastructure, will talk about CVM resolution 88 and its implications for investors.
WHAT IS CVM RESOLUTION 88
CVM Resolution 88 is the normative instruction of the body responsible for the administration of securities in the country that regulates investment crowdfunding operations, replacing Resolution 588 of 2017.
The current regulations bring a series of significant changes for companies interested in opening growth and development projects through participatory investment.
WHAT IS EQUITY CROWDFUNDING
Equity crowdfunding is a form of collective financing in which investors buy shares or stakes in a company, which capitalizes its activities and projects in a way that is not the banking system with high interest rates and collateral requirements.
As we can see, investment crowdfunding differs completely from the rewards model, as the gain is related to the person’s participation percentage in the project in question.
Equity crowdfunding has become a financing alternative for startups and small businesses to raise capital and democratize access to investment.
It is an investment modality that has many similarities with tokenization.
WHAT ARE THE MAIN CHANGES WITH CVM RESOLUTION 88
HIGHER FUNDING LIMITS
The limits for raising funds through crowdfunding have been substantially increased.
- Funding limit from R$5 million to R$15 million;
- Individual annual gross revenue limit from R$10 million to R$40 million;
- Consolidated annual gross revenue limit from R$10 million to R$80 million.
What is the impact on the investment market?
One of the main aspects of the CVM 58 definitions is the substantial increase in the potential for the equity crowdfunding market, expanding the universe of projects and also the volumes for fundraising.
Opportunities to invest in the most diverse market segments and company sizes increase. This helps to increase the flow of investors, as they will have more options for products and services, choosing based on preference and also based on the relationship between risk and return.
INVESTOR LIMITS
Apart from qualified investors – with investments or annual gross income above R$1 million – CVM resolution 588 increased investment limits to lower levels.
- Investors with up to R$200,000 in investments or income can invest up to R$20,000 per year in startups;
- Investors with investments and income between R$200,000 and R$1 million can apply 10% per year on the larger amount.
What is the impact on the investment market?
Increases in investment limits allow people to invest in startups and diversify their portfolio of financial products.
CAPTURED BY EXCESS DEMAND
The CVM resolution allows the company to raise 25% more in each round of investment when there is excessive demand, at its option, which favors strategic decisions between immediately expanding funding or letting the demand continue to a next round.
What is the impact on the investment market?
This mechanism did not exist in the Brazilian market. With his entry, companies can raise more resources at times of opportunity instead of waiting for a possible good round. This gives them another strategic resource.
RESOURCES FOR ACQUISITION
Startups can use part of the capital raised through crowdfunding to acquire control of another company (or companies), which was not allowed until then.
What is the impact on the investment market?
This mechanism did not exist in the Brazilian market. With his entry, companies can raise more resources at times of opportunity instead of waiting for a possible good round. This gives them another strategic resource.
TOKENIZATION OFFERS COUNTLESS POSSIBILITIES FOR INVESTING
Tokenizing company growth and development projects is also an excellent way to capitalize on operations and remunerate investors attractively.
It is an investment modality that is growing every day and stands out for its diversity of businesses, for companies of all sizes, sectors of activity and objectives with resources.
Several sectors of the economy already operate with capitalization with business tokens:
- Real estate tokenization;
- Tokenization of agribusiness;
- Tokenization in sport and entertainment;
In addition to being a technically simple process, carried out through tokenizing project companies such as BLOCKBR, investing in tokens is easy and quick.
TOKENIZE YOUR ASSETS WITH BLOCKBR!
Tokenization is a reality that is becoming present in all segments and business models, it is not something so innovative that it should still be seen with suspicion. Companies and individuals are currently monetizing tokens.
Recent actions by BACEN and CVM signal that tokenization is legal and the digital real will be a great divisor to increase the credibility of technology for those who want to invest in digital assets.
Offering your business token is simpler than you might think. Do you want to see the competition come out ahead?
Come and talk to BLOCKBR.
We have the best token offering strategy on the market!
INVEST AND EARN MORE WITH TOKENS ON BLOCKBR!
Buying token is not complicated if you invest with someone who makes it easy! Just open an account with a qualified asset tokenization company and create a digital wallet to store your applications.
Access our token marketplace, learn about the most varied offers and choose the ones that align with your investor profile. And you can start investing in digital assets for as little as 50 reais!
Open your account with BLOCKBR and earn more with your investments!
BLOCKBR Digital Assets is a fintech specialized in asset and investment tokenization that delivers infrastructure for the regulated and unregulated market through the All-In-One platform that offers transformation and interoperability between assets and investors.
For more information, visit: http://www.blockbr.com.br or @blockbr_ on social networks