The Securities and Exchange Commission of Brazil (CVM) authorized an operation in order to facilitate investments by tokenizing assets, which has been known as “startup market”. This measure is part of an effort to upgrade financial market and make it more accessible to entrepreneurs, reducing the amounts charged in investments.
Tokenization is a technology that allows the conversion of physical or financial assets into digital tokens, which may be traded in blockchain platforms. These tokens represent a property or rights of a certain asset and can be freely negotiated among stakeholders. In practice, tokenization becomes investment democratization possible, allowing people with different profiles to invest in startups with lower bureaucracy and costs.
This decision by CMV can incentive Brazilian startups to adopt tokenization, and thus, can increase liquidity of companies’ assets, allowing them to capitalize more easily.
Tokenization is a technology with great potential to revolutionize the financial market and allow investments to be democratized. With an authorization by CMV, it is possible for more Brazilian startups to adopt this technology and increase their financing opportunities.
Written by Marcos Ferreira, Content Assistant to Drummond Advisors