What is myth and what is truth about the use of Blockchain in Regulated Market Infrastructures? What are the practical applications of Blockchain in this sector and the implementation challenges? The answers were discussed among experts and representatives of companies and entities this afternoon during Tokenize 2024, organized by Núclea, a reference in infrastructure solutions for digital transactions and data intelligence, and by Febraban.
The importance of governance in the segment was debated at the event, with reflections on risks, cost reduction, intermediation in the chain, solutions, security, and regulation.
In panel 4, which opened the afternoon with the theme "Myths and Reality about the Use of Blockchain in Regulated Market Infrastructures," Guto Antunes, Head of Digital Assets at Itaú Digital Assets, stated that the technology brings a different functionality to the market, leading to a more efficient market, "but at the same time, we hear a lot that they are trying to centralize the market. When you try to decentralize to a certain point, you close it, you don't open it, because it generates insecurity and you need to have controls. We need to stop talking so much about decentralization and think about scalability, which is the point we are at today," reflected the executive.
Jochen Mielke, CEO of B3 Digitais, analyzed that the DLT environment is a collaborative game. “Brazil, in general, has taken the lead not only through the work of its institutions, but also through that of its regulators. To function, it needs open channels, a collaborative process, avoiding the creation of various sub-networks and elements that end up creating some kind of friction in the system, and always keeping in mind the three questions: will there be less friction? Will it be cheaper? And will it be safer?”
For Leandro Sciammarella, a blockchain and tokenization specialist at Núclea, there is confusion in thinking that we should do everything all-chain, since there are parts that are not present in this structure. “I still strongly believe in the hybrid model; we have to put Blockchain or DLT where it adds value,” he argues. Sciammarella also emphasized the importance of thinking about the field of disintermediation, which is made up of several other fields. “A second stage is missing, which is to delve deeper into the scenarios. There is a demand to use the technology immediately, but we have to be careful not to disintermediate everything, but to find the points of evolution.”
George Marcel Smetana, innovation specialist at Bradesco, emphasizes that "there is a fallacy in the world of blockchain: intermediation." The executive underlines that it is first necessary to think about the requirements, and then about the technological solutions. "It's not a question of having a central depository or not; I'm thinking more about the issue of accountability than the technological infrastructure." Smetana points to the perception of value as a major concern in the current market, noting that competition is responsible for reducing prices.
In the fifth panel of the day , "Practical applications of blockchain in the regulated market and implementation challenges," Paloma Sevilha, partner and Head of Market Infrastructure at BEE4, shared the company's experience to explain the potential benefits of this innovation. “We have an opportunity for optimization with this new technology. The reconciliation that was previously done daily, with blockchain, is done in real time, so with each transaction I have, I am impacting the position of each individual wallet, of each client. You don't need to wait until the end of the day to do this processing; you can, throughout the day, already notice some discrepancies, which brings efficiency and reduces risks.”
The moderator, Cesar Kobayashi, Superintendent of Tokenization and New Assets at Núclea, highlighted that the financial system is 'all about' integration and connectivity. “And naturally, blockchain brings a technological paradigm of doing this in a different way – and through this different way, also adding other benefits, such as programmability and automation,” he emphasized.
The Director of the CVM, Marina Copola, explained that innovation processes happen with some frequency in the financial capital market – this comes in cycles, as is happening now. “The good thing about this is that it’s not the first time regulators are dealing with an innovation cycle. So, how do we navigate this cycle while embracing these advantages and benefits, with security, transparency, and privacy, but without abandoning the guiding pillars of capital market regulation that have always guided it?”
The signing of a Cooperation Agreement between the CVM (Brazilian Securities and Exchange Commission) and the National Federation of Associations of Central Bank Employees (Fenasbac) on innovation also took place – the aim of the partnership is to develop new experimental laboratory initiatives.
In closing , the Vice-President of Finance, Investor Relations and Legal Affairs of the Nucleus, Joyce Saika, highlighted the importance of the integration of the bodies in this advancement of legislation. “We need this community to continue discussing, because this collaboration is very important for regulatory advancement in Brazil, being a global reference in the adoption of these new technologies.”
“It is a privilege to participate in such a relevant event for the market, not coincidentally held at the CVM headquarters, addressing such important aspects of DLT use in regulated infrastructures and participants. The panels provided space for discussions on the potential of applications, considering the challenges of implementation in a technical and pragmatic way, taking into account the dynamics of market operation and regulatory concepts,” says Patricia Stille, co-founder and CEO of BEE4, summarizing the event.
Tokenize 2024 – “Blockchain in regulated market infrastructure: challenges and opportunities” is an event organized by Núclea, a leader in digital transaction infrastructure solutions and data intelligence, in conjunction with Febraban and with institutional support from the CVM.
Program Schedule:
During the morning, the event began with the president of the CVM (Brazilian Securities and Exchange Commission), João Pedro Nascimento, followed by the first panel, “Regulation of Digital Assets: How to establish standards for the future?”, with himself and with Joaquim Kavakama (Núclea), Luis Vicente de Chiara (Febraban), and Carlos Ratto (Safra), moderated by Antônio Berwanger (SDM).
Next, the panel “Blockchain in the Capital Market: Value Propositions that justify strategic decisions” took place, moderated by Rodrigo Furiato (Núclea) and with the participation of André Daré (Núclea), Daniel Maeda (CVM), Antônio Marcos Guimarães (Central Bank of Brazil), Eric Altafim (Itaú), and João Accioly (CVM).
The discussion that followed was about “Transition of stock exchanges to D+1 and the potential of DREX in securities settlement”, with Patricia Stille (BEE4) as moderator and André Portilho (BTG Pactual), Marcelo Belandrino (JP Morgan), Margareth Noda (CVM) and Otto Lobo (CVM) as panelists.
In the afternoon, the panel “Myths and Reality about the use of Blockchain in Regulated Market Infrastructures” took place, with Felippe Barretto (CVM) as moderator and Leandro Sciammarella (Núclea), George Marcel Smetana (Bradesco), Guto Antunes (Itaú Digital Assets) and Jochen Mielke (B3 Digitais).
In the fifth panel, the theme was “Practical applications of blockchain in the regulated market and implementation challenges”. Cesar Kobayashi (Núclea) will moderate the conversation between Márcio Castro (RTM), Paloma Sevilha (BEE4), Marina Copola (CVM) and André Passaro (CVM).
To close the event, the closing discussion was on the “Regulatory Agenda to Accelerate Innovation and Market Development,” with Joyce Saika (Núclea), Alexandre Pinheiro dos Santos (CVM), and Luis Vicente de Chiara (Febraban).
TOKENIZE 2024 Service – “Blockchain in Regulated Market Infrastructure: Challenges and Opportunities”
Organized by Núclea and Febraban with institutional support from CVM.
Date : October 10th.
Time : 9:00 AM to 5:00 PM
Tokenize 2024: Reflections on the use of Blockchain in infrastructure dominate the afternoon panels.
