Brazil’s securities regulator is pressing for mandatory tokenization as part of a broader effort to modernize how it tracks activity in the country’s fund industry. Otto Lobo, president of the Comissão de Valores Mobiliários (CVM), Brazil’s equivalent of the U.S. Securities and Exchange Commission, argued that tokenization combined with artificial intelligence-based supervision is needed to replace traditional surveillance methods that have been rendered obsolete by the scale of the fund structure.
The CVM’s push centers on the size of the market it oversees. According to the regulator, the fund structure has a net worth of $2.32 trillion, a scale that strains conventional monitoring approaches. Lobo framed mandatory tokenization and AI supervision as necessary tools for modernizing surveillance rather than as an optional technological upgrade, according to remarks reported in coverage of the proposal.
The initiative places Brazil among jurisdictions exploring how distributed-ledger technology can be applied to market infrastructure and oversight, rather than solely to trading or issuance of crypto assets. In this case, tokenization is being positioned as a surveillance mechanism: representing fund positions and related data in tokenized form could give the regulator a more direct and timely view of activity across a market whose current size complicates manual or legacy tracking.
The concrete context is the Brazilian fund industry itself, which the CVM says has grown to a scale that traditional surveillance methods can no longer handle effectively. The regulator has not, in the reported remarks, detailed a full implementation timeline, the specific token standards to be used, or which categories of funds would be covered first. Those operational questions remain central to how the proposal would work in practice.
The proposal matters because it signals a shift in how a major emerging-market regulator intends to use tokenization. Rather than focusing on investor-facing crypto products, the CVM is tying the technology to supervisory infrastructure, pairing it with AI to process and monitor market data. If adopted, the approach could change reporting and compliance obligations for fund managers and administrators operating in Brazil, and it could serve as a reference point for other regulators weighing similar models.
What to watch next is the CVM’s formal rulemaking path. Market participants will be looking for details on whether tokenization would be phased in by fund category, how existing reporting systems would be integrated, and what role AI supervision would play in enforcement and data analysis. Also worth monitoring is how the fund industry responds, particularly on implementation costs and data standards, and whether the mandatory element of the proposal survives consultation with market participants.
The push comes as Brazil continues to develop its regulatory framework for digital assets and market infrastructure. For now, the CVM’s position is clear: it views mandatory tokenization, paired with AI supervision, as the route to keeping surveillance effective in a fund market measured in trillions of dollars.
Source: https://news.bitcoin.com/finance/brazil-pushes-mandatory-tokenization-to-overhaul-market-tracking/