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The Comissão de Valores Mobiliários (CVM) of Brazil is planning to start a second regulatory sandbox program in 2024.

Speaking at Rio Innovation Week on Oct. 4, the superintendent of institutional investor supervision with the CVM, Daniel Maeda, said the regulator will be exploring a regulatory sandbox for use cases of tokenization potentially starting in 2024. According to Maeda, the regulator’s efforts to launch the second sandbox followed positive experiences tokenizing roughly $36 million in assets.

“We do not define specific cases, because we want to let innovation reach the CVM, without prior limitations,” Maeda said to Cointelegraph Brazil. “But some areas for the application of tokenization certainly catch our attention, such as agribusiness and [Environmental, Social, and Governance].”

The superintendent added that the CVM planned to wait for changes to be implemented related to Brazil’s crypto market including those for the country’s central bank digital currency, the Drex. According to Maeda, both the securities regulator and central bank should consider developments in the digital asset space as well as how other countries have handled regulation.

“I have a lot of respect for the [United States SEC}, and I don’t think it’s up to me to point out their stance as right or wrong,” said Maeda. “What I can say is that we, at CVM, saw many benefits in this market to leverage processes. Through tokenization, the investor gains in transparency and lower costs, in addition to increasing the democratization of investments, which are values ​​that the commission carries.”

Related: Brazil BTG Pactual bank buys Bitcoin-friendly brokerage Orama for $99M

Brazil’s central bank announced a tightening of regulations in October amid a significant surge of crypto adoption in the country. Governor Campos Neto specifically called out connections between using crypto and tax evasion or illicit activities.

Brazilian President Luiz Inácio Lula da Silva signed a framework into law in June establishing the different roles the country’s central bank and CVM would have in regulating digital assets. In November, Brazil plans to roll out a program issuing identification documents through a private blockchain as part of efforts to protect personal data and prevent fraud.

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