• The Brazilian Securities and Exchange Commission (CVM) has approved the ability for investment funds to include crypto assets among their holdings.
• In order to be part of fund portfolios, crypto assets must follow a set of criteria established by a new law passed by Jair Bolsonaro.
• The criteria includes that the crypto assets must be traded in entities authorized by the Central Bank of Brazil or the CVM, or by a local supervisor in the case of operations abroad.
The Brazilian Securities and Exchange Commission (CVM) has taken an important step towards the adoption of cryptocurrency in the country. On Friday, the CVM approved the inclusion of digital assets in investment funds in the country. This move is expected to increase the access of many investors to the crypto market.
In a statement, the regulator explained that the decision seeks to allow funds to operate in the crypto segment while paying attention to controls related to the integrity and ownership of the assets. The CVM noted that it will enable funds to access the crypto segment in a secure and supervised manner.
In order to be part of fund portfolios, the CVM said that crypto assets must follow a set of criteria in line with a new regulatory framework established in a law enacted by the outgoing president, Jair Bolsonaro, on Thursday. The criteria includes that the crypto assets must be traded in entities authorized by either the Central Bank of Brazil or the CVM, or – in the case of operations abroad – by a local supervisor.
The CVM also noted that crypto assets must be issued and traded in compliance with the applicable regulations, including the Brazilian Anti-Money Laundering (AML) and Counter Terrorist Financing (CTF) regulations. Additionally, the CVM requires that the crypto assets must be held in segregated wallets and that the funds must have systems in place to ensure that they can monitor the transactions they make in digital assets.
The new law is a major step forward for the crypto industry in Brazil, as it will open the door to institutional investors and expand the access of many investors to the crypto market. The CVM expects that the new framework will enable funds to participate in the crypto segment in a secure and supervised manner.
The approval of the new regulations is the latest development in the crypto space in Brazil. In recent months, the country has seen a surge in the interest in cryptocurrency, particularly with the emergence of new players such as exchanges and payment processors. The new regulations are expected to further boost the adoption of cryptocurrency in the country.