The Brazilian Securities Commission’s CVM paved the way for funds to dive into cryptocurrency-based investments. The institution will issue a new set of rules that will allow financial investment funds to invest in cryptocurrency tokens with the same protections offered to other investment assets such as stocks and bonds, opening a new market for these companies. opened.
Brazilian Securities Commission’s CVM Regulates Cryptocurrency Investments for Funds
Brazil has taken another step towards the normalization and adoption of cryptocurrencies as an investment vehicle. The Brazilian Securities Commission has approved a new set of rules to allow established funds to invest in cryptocurrencies, opening up new markets for these institutions.
The standards, passed after President Jair Bolsonaro authorized the cryptocurrency law last week, allow these companies to invest in cryptocurrencies so they can enjoy the same protections available to other investment assets such as stocks and bonds. Regulating.
The Approved Framework explicitly requires that operations using cryptocurrencies must be conducted on exchanges approved by the Central Bank of Brazil or the Brazilian CVM. If these are made offshore, the investment should be supervised by a local supervisor.
In any case, these bodies “have the legal authority to supervise and inspect activities carried out, such as curbing market abuses, money laundering, terrorism financing, and proliferation of weapons of mass destruction.” will be.”
However, not all assets are allowed into the portfolios of these funds. Because these assets must fall into the categories outlined in the newly approved cryptography law.
Adoption and regulatory evolution
The issuance of this new framework comes days after the country’s cryptocurrency law was sanctioned, indicating that Brazilian institutions are keen to normalize the status of these assets in several areas. The Brazilian Securities Commission itself performed a pivot, denying funds the opportunity to invest in cryptocurrencies in 2018.
However, the commission changed the law a few months later, allowing funds to invest in cryptocurrencies offshore, albeit indirectly. Brazil has shown a significant level of crypto adoption by both citizens and businesses. According to figures provided by the Brazilian Tax Authority (RFB), about 42,000 companies bought cryptocurrencies in October, setting a new buying record.
Except for individuals, the same purchase record was broken in September when nearly 1.5 million people bought crypto. It has launched or plans to offer cryptocurrency services, and is also developing a digital version of Brazil’s legal tender, the Real. .
What do you think of the new rules approved by the Brazilian Securities Commission? Let us know in the comments section below
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