Brazil’s CVM Securities Commission has cleared the way for funds to enter cryptocurrency-based investments. The institution issued a new set of rules that allow financial investment funds to invest in cryptocurrency tokens with the same protection offered to other investment assets such as stocks and bonds, opening up new markets for these companies.
The Brazilian Securities Commission CVM regulates cryptocurrency investments for funds
Brazil has taken another step to regulate and adopt cryptocurrencies as investment instruments. Brazil’s Securities Commission has approved a new set of rules that now allow established funds to invest in cryptocurrencies, opening up a new market for these institutions.
The norms, which were enacted after President Jair Bolsonaro approved a cryptocurrency law last week, regulate crypto investments in a way that will allow these companies to enjoy the same protections available to other investment assets such as stocks and bonds.
The approved framework specifically requires that cryptocurrency operations must be conducted on exchanges approved by the country’s Central Bank of Brazil, or CVM. If it is abroad, the investments will have to be supervised by a local supervisor.
In any case, these institutions “will have the legal authority to supervise and inspect the operations carried out, including with regard to the suppression of market abuse, as well as money laundering and financing of terrorism and the proliferation of weapons of mass destruction.”
However, not every asset will be allowed to enter the portfolio of these funds, as they will have to fall into the categories specified in the newly approved crypto law.
Adoption and regulation are evolving
The issuance of this new framework just days after the sanction of the country’s cryptocurrency law shows that institutions in Brazil are eager to regulate the status of this asset in several areas. The Brazilian Securities Commission itself has pivoted, denying funds the ability to invest in cryptocurrencies as early as 2018.
However, the Commission changed this law a few months later to allow funds to invest in crypto offshore, albeit indirectly. Brazil has shown a significant level of cryptocurrency acceptance by citizens and businesses. According to figures presented by Brazil’s Tax Administration (RFB), nearly 42,000 companies bought cryptocurrency during October, breaking purchase records.
The same purchase record, but for individuals, was broken during September when almost 1.5 million people bought cryptocurrencies. Due to this popularity, several traditional and digital institutions have started or will offer cryptocurrency services in the country, including Nubank, Itau and Santander, and even a digital version of Brazil’s real, fiat currency is also in the works. .
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