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What are the Central Bank and CVM saying about tokenization?

Tokenization has become a reality in the never-ending path of digitization of economies. It is a more than proven form of agility and security in the supply of goods, products, services, and rights, and the Central Bank is attentive and receptive to this transformation.

Tokenizing the financial system, promoting more integration among its several players, is something quite advanced in the country, according to BACEN’s president, Roberto Campos Neto, in the FEBRABAN TECH 2022 event.

Several decisions by the agency and the CVM, as well as key initiatives such as the regulatory sandbox, a decisive step towards the development of token-based solutions.

This favorable environment for tokenization development will bring benefits to various business models that can use token generation as an effective offering and transaction vehicle.

But to what extent have BANCEN and CVM fostered the growth of the market?

BLOCKBR, a web 3.0 native company, brings you a panel on important changes and how tokenizers, companies and individuals should prepare for this scenario!

THE BEGINNING OF A TOKENIZED ECONOMY

CENTRAL BANK AND THE PROMOTION OF THE TOKENIZED ECONOMY

At the end of 2021, BACEN announced the authorization to issue tokens in the financial system. It is a very important first step in the direction of fully incorporating tokenization into economic and financial activities.

According to the president of the Central Bank, Brazil is on a journey towards a more integrated and more digital financial system, and society is migrating from an account-based economic model to a token-based model.

In this context, individuals and companies are seeking to digitalize the value of goods and rights so that they can be verified and transferred securely, transparently, more quickly, and using state-of-the-art technology.

Still according to Roberto Campos Neto:

If the tokenization thesis is true, the 21st century will bring the creation of multi-agent networks regulated, global, and tokenized. And that is a very big modernization. We are talking about tokenization, we are talking about digital assets and the financial system of the future.

To this end, BACEN has created a regulatory sandbox – an experimental technological environment that allows several financial institutions to test innovations using real market conditions without having to undergo regulations and processes.

CVM AND THE CONSOLIDATION OF BUSINESS TOKENS

In a key step for the market’s understanding of business tokens, the Securities and Exchange Commission [067-018] released Guidance Opinion 40 which regulates cryptoactive assets as securities.

It is a document, according to the agency, with the purpose of:

  • Educate the market about the characteristics of tokens to further reduce the gap in understanding of companies and institutions regarding the opportunities that tokenization can provide;
  • Promote more predictability and security for the market;
  • Contribute to the development of the cryptoeconomy and align it with legal and constitutional principles.

TAXONOMY OF TOKENS

CVM has defined the taxonomy of business tokens in the following categories:

  • Asset tokens: These are those that represent tangible and intangible assets, and in this category, the body has gathered traditional assets (real estate, inventories, receivables, collectibles),security tokens, and stablecoins;
  • Utility tokens; known as utility tokens, are those used to represent access to services and products;
  • Payment tokens: These are cryptocurrencies, used as a medium of exchange and store of value.

An important definition is that CVM understands that an asset token can be a security or not. Also, the classes created are not immutable and a token can belong to more than one category. His role within a project is what will define his classification.

The taxonomy is intended to facilitate legal understandings about tokens when they are needed.

A CHEGADA DO REAL DIGITAL

THE ARRIVAL OF THE DIGITAL REAL

Brazil is about to definitely enter the era of the virtual version of money; the first tests of the digital real or tokenized real are scheduled for 2023.

Surely, you must be wondering: why is BACEN talking about an official Brazilian cryptocurrency backed by fiat currency, if the use of digital means of payments is growing and digital currencies are also multiplying?

In fact, the Brazilian digital currency brings benefits that are closely linked to the way the tokens are operated.

USE ABROAD WITHOUT FEES

This is one of the main advantages of cryptocurrencies that will be part of the lives of those who travel or live abroad: it will be possible to make payments without credit card fees and taxes anywhere on the planet. Simply transfer the balance from the e-wallet.

UNMEDIATED PAYMENTS

Payments with monetary tokens are peer-to-peer, directly between buyer and seller digital wallets (or between points in value transfers), eliminating intermediaries and making transactions even more agile – and at no cost to merchants.

Digital Assets in 2022: A look at the year of investments!

ARE DIGITAL REAL AND MARKET CRYPTOCURRENCIES THE SAME THING?

Not.

Calling the digital real a Brazilian cryptocurrency is a (correct) way of relating it to the advantages of payment tokens. However, there is one important difference: the centralization of emissions.

While cryptocurrencies are decentralized – there is no one power that controls the issuance – the digital real will be issued only by BACEN, with custody and market distribution to be handled by banks and financial institutions.

The idea is for banks to turn deposits into stablecoins – digital currencies with parity to the real. As Roberto Campos Neto stated “Our digital currency will be a tokenized deposit.”

The digital real is expected to start circulating in 2024.

HOW THE TOKENIZATION MARKET SHOULD PREPARE ITSELF

About all the effervescence of the world markets with the possibility of tokenizing goods and rights and further digitalizing business, the president of BACEN brought an important insight.

“I see a lot today, especially in the central banks of developed countries, a willingness to ‘if I can’t regulate, I want to expel. Actually, we wanted to do the opposite, if I can’t regulate, I want to bring it as close as possible.”

This is a message for market sectors to see tokenization as something present in people’s day-to-day lives, and these, in turn, will demand more from companies in terms of business transformation.

Some factors should occur and boost this market even more.

  • The positive reception to tokens in various sectors – relationship programs, blockchain games, soccer club fan tokens, and other initiatives;
  • The democratization of investment, because it is possible to start investing in tokens with 50 reals!
  • The regulation of cryptocurrencies that will benefit the token market;
  • Entering markets with strong regulatory control such as real estate.

Tokenization will become a competitive differential!

OPEN AN ACCOUNT TO INVEST IN TOKENS AT BLOCKBR

You can buy tokens through the token marketplace of a tokenizing company like BLOCKBR with an account and a digital wallet.

Here, you will find excellent opportunities, in a high-tech environment to invest with security and obtain great results. Want to know more?

BLOCKBR Digital Assets is a web 3.0 native fintech that unites technological innovation and digital knowledge to transform physical assets into digital assets, in the process of tokenizing assets.

The supply of physical assets and tokenized financial assets, both current and new, is democratic and decentralized, which makes the way of investing safe, simpler and more efficient.

We enable, structure, issue and offer tokens on our platform and beyond. Be aware that tokens depend on feasibility and regulatory factors.

Do you want to tokenize your business or part of it? Do you have a business solution and does it make sense to issue your own token ?

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