Brazil’s securities regulator calls for mandatory tokenization paired with AI-driven surveillance to modernize capital-market oversight. On Friday, October 23, Otto Lobo, president of Brazil’s Comissão de Valores Mobiliários (CVM), told the IV Congress of Investment Fund Law organized by the Associação dos Advogados that the country’s capital market supervision infrastructure now requires a compulsory shift to tokenization together with artificial-intelligence-based monitoring.
He spoke as the domestic investment-fund industry reached R$ 11.5 trillion in net assets across more than 34,000 active structures—scale and speed that have rendered traditional analog and after-the-fact inspection methods obsolete.
The push for modernization follows a Supreme Federal Court decision (ADC 7791) and recommendations from the International Monetary Fund that would allow the CVM to retain 70 percent of its supervisory fee.
Lobo linked the technological agenda to a planned expansion of the regulator’s technical staff, with roughly 1,200 new personnel expected over four years.
“We assume the fiduciary responsibility of leading this technological transformation, ensuring that integrity, governance, and investor confidence remain non-negotiable as the market migrates to native digital rails,” he said.
Traditional market infrastructure operated by the exchange B3 and the self-regulatory body BSM will continue to run in parallel with the emerging track of tokenized assets and smart contracts.
Lobo outlined five concrete surveillance capabilities that distributed ledger technology (DLT) can supply.
First, immediate physical and financial settlement would eliminate counterparty risk and the conventional time lag between trade and settlement. Second, a continuous audit trail would automatically record orders and executions in a Consolidated Audit Trail format.
Third, native tracking of ultimate beneficial ownership—already linked to Brazilian tax identifiers (CPF/CNPJ)—would be embedded in the digital registration layer itself.
Fourth, anti-money-laundering, know-your-customer, and other compliance rules would be coded directly into the assets via smart contracts.
Fifth, cross-market surveillance would enable real-time monitoring that spans both decentralized platforms and conventional exchanges.
The CVM’s Tokenization Working Group is already running execution tests on three DLT networks focused on the issuance of native digital assets and institutional use cases.
Lobo expects these experiments to lower minimum investment thresholds and fragment liquidity into smaller, more accessible units.
He pointed to international precedents, noting that Franklin Templeton has launched approximately US$ 3 billion in tokenized fund assets across multiple markets and institutions.
Potential advantages include reduced costs, faster operations, and continuous yield calculation; in one money-market fund example, the minimum entry point fell to US$ 20.
“We are already testing three DLTs, with the possibility of creating native digital assets and therefore supervising this market in a very different way,” Lobo stated.
Drawing on experience gathered abroad, he emphasized that technological innovation must be accompanied by sustained confidence in the capital markets.
“With regard to tokenized assets, the most important thing is the maintenance of market integrity.”
The remarks position mandatory tokenization not merely as an efficiency upgrade but as a foundational requirement for real-time, AI-augmented oversight capable of matching the size and velocity of Brazil’s capital markets.
