- Three broad groups of crypto assets are defined within the paper.
- The CVM will keep close track of the cryptocurrency markets as pointed out within the paper.
Inside a recent advisory opinion paper, the Brazilian Registration (CVM) addresses the subject of crypto-based securities. Inside it, too little regulation is acknowledged, and cryptocurrencies are understood to be digitally symbolized assets. Safeguarded by cryptographic technology, and transacted and stored by Distributed Ledger Technologies (DLT).
Tokens that satisfy the new needs must reflect digital versions of shares, debentures, subscription bonuses, right coupons, subscription receipts, split certificates, cds of securities, and debenture notes.
Categorization For Securities
Furthermore, similar factors affect other tokens, which, based on their categorization, can also be considered securities. Additionally, the CVM managed to get obvious that previous permission or registration isn’t needed for tokenizing assets. Nevertheless, when the resultant tokens are securities, they have to stick to relevant laws and regulations.
Three broad groups of crypto assets are defined within the paper. The first sort, referred to as payment tokens, includes assets that try to imitate the performance of fiat money. These characteristics include individuals of the unit of account, a medium of exchange, along with a store of worth.
In addition, the 2nd type of tokens is known as “utility tokens,” also it includes any token which may be utilized on a particular service or product. Tokens that stand it for other assets, either real or virtual, come under the 3rd category, “asset-backed tokens.” Stablecoins, security tokens, and non-fungible tokens (NFTs) all come under this category.
The CVM makes obvious that, with respect to the nuances of each token within this final class, they might be considered securities. Furthermore, based on the paper, the CVM will keep close track of the cryptocurrency markets and do something according to these new criteria.
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