Managing risk and novelty in nascent markets: an overview of the regulation of digital assets, smart contracting, tokenisation and legaltech in Brazil

Blockchain technology has become a transformative force in the global digital economy, redefining transactional architecture through decentralisation, immutability and transparency. In Brazil, this innovation has progressed beyond niche adoption to influence institutional frameworks, regulatory strategies and contractual practices. Central to this evolution are tokenisation and smart contracts, which introduce new possibilities for fractional ownership, liquidity and automated performance. Brazil’s regulatory approach is technology-neutral and functional, ensuring that the legal nature of an underlying asset determines applicable rules. Tokens representing securities fall under the Securities and Exchange Commission’s oversight, while non-security virtual assets are governed by Law No. 14,478/2022 and forthcoming Central Bank resolutions, which impose stringent operational as well as anti-money laundering and combatting the financing of terrorism (AML/ CFT) requirements on virtual asset service providers. The Central Bank of Brazil’s Drex project, a tokenised version of the Brazilian Real, exemplifies this commitment to modernising financial infrastructure. Smart contracts, recognised under the Civil Code’s principle of freedom of form, promise efficiency and certainty but raise complex questions regarding their enforceability and the need for judicial intervention. Tokenisation of real-world assets such as real estate and commodities remains subject to substantive private law and official registration systems. This article highlights how Brazil reconciles cutting-edge automation with established legal doctrines, positioning itself as a leader in the global digital asset ecosystem.