CVM Grants Funds the Right to Invest in Cryptocurrencies


The Brazilian Securities Commission, CVM, has now granted financial investment funds the right to invest cryptocurrency tokens with the same protections as other investment assets like stocks and bonds. This opens up new opportunities for these firms.

CVM Regulates Funds Investment in Cryptocurrency

The Brazilian government has taken a major step toward the adoption and regulation of cryptocurrencies as investment tools. The new rules granted by the Brazilian Securities Commission allowed existing funds to invest in cryptocurrency, creating a new market.

The framework was approved by President Jair Bolsonaro. A cryptocurrency law was passed last week, which regulates investments in cryptos so that they can enjoy the same protections as other investment assets such as bonds and stocks.

The approved rules require that cryptocurrency operations only be performed on exchanges that have been approved by the Central Bank of Brazil or by the country’s CVM. If these investments are made in another country, they must be monitored by a local supervisor.

In any case, these institutions have legal competence to supervise and inspect operations they carry out, such as curbing abusive practices in the market, as well as preventing money laundering and the financing of terrorism and the proliferation of weapons of mass destruction.

However, these funds will not be able to include all assets in their portfolios, as they must fit within the cryptographic laws that were recently approved.

The Evolution of Regulations and Legislation

Institutions in this country are pleased to see the new framework being issued only days after the nation’s cryptocurrency law was passed. Brazil is looking to improve the condition of these assets in various locations. The pivot of the Brazilian Securities Commission denied funds the chance to invest in cryptocurrency in 2018.

However, this law was amended by the commission months later, allowing funds, though not directly, to invest in cryptocurrency abroad. Both citizens and businesses have shown a great deal of adoption of crypto. Figures from Brazil’s Tax authority (RFB) revealed that almost 42,000 companies purchased cryptocurrencies in October, breaking purchase records.

The same purchase record was broken for individuals in September when nearly 1.5 million people purchased cryptocurrencies. Due to this popularity, various digital and traditional institutions have begun or are planning to offer cryptocurrency services in the nation, including Nubank, Itaú and Santander. There are even digital versions of Brazil’s fiat currency in the works.

What do you think of the new rules adopted by the Brazilian Securities Commission? Leave your comments below.

Sergio Goschenko

Sergio is a cryptocurrency journalist from Venezuela. He entered the cryptosphere late, when the price spike happened in December 2017. His background in computer engineering and his experience of the impact of cryptocurrencies on a social level gives him a unique perspective on the rise of cryptocurrency and the ways it can benefit the poor and the unbanked.

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