Project takes asset tokenization from controlled testing to live operation in a real market environment
CSD BR, a financial market infrastructure authorized to operate as a registrar, central securities depository and settlement system, today announced the first phase of a strategic partnership with Ripple, the leading provider of blockchain solutions across traditional and digital finance. The initiative marks a new step in the evolution of asset tokenization in Brazil, combining the robustness of CSD BR's regulated infrastructure with the decentralized blockchain technology of the XRP Ledger (XRPL).
In this first phase, CSD BR will begin using the XRP Ledger as an additional layer for recording and auditing financial assets, starting with BTG Pactual investment fund shares. For the first time, a central securities depository for financial assets and securities will use a public blockchain to mirror securities ownership records, while CSD BR's systems remain the official source of record for registration, deposit and settlement of the assets.
With more than BRL 22 trillion in registered assets, CSD BR operates a highly scalable infrastructure capable of processing millions of transactions in a matter of minutes. The partnership will make it possible to assess, in a regulated environment and with live transactions, the gains in transparency, traceability, automation and efficiency delivered by blockchain technology. The model was developed within the current regulatory framework, without changing participants' legal responsibilities or requiring new regulatory approvals.
HOW THE MODEL WORKS
In the first phase of the project, BTG Pactual investment fund shares deposited at CSD BR will be tokenized and mirrored on the XRP Ledger using the Multi-Purpose Token (MPT) standard. The official record will continue to be maintained by CSD BR's systems. The blockchain will act as a complementary layer for querying and auditing, allowing authorized participants to validate the consistency of the records transparently and in near real time.
The architecture combines Ripple's custody infrastructure with the native capabilities of the XRPL to support tokenized financial assets in a compliant onchain environment. The environment will operate on a permissioned basis, restricted to corporate and banking clients in Brazil subject to regulatory Know Your Customer (KYC) and anti-money laundering (AML) procedures.
CSD BR will retain full control over the issuance and administration of the assets, preserving essential governance and compliance functions, including participant authorization mechanisms, the ability to freeze individual assets, and the ability to reverse transactions (clawback) when required by regulatory or judicial order.
"We chose to start with record mirroring because it is the safest and most responsible way to introduce a new technology into critical market infrastructure. In this phase, current processes remain unchanged for investors, issuers and participants. The goal is to evaluate how the technology performs under real operating conditions and build a solid foundation for future developments," said Daniel Polano Spreafico, Head of Products and Clients at CSD BR.
"Moving beyond pilots and proofs of concept to a live record-keeping infrastructure in a national capital market is a major milestone for the industry. This partnership shows how distributed ledger technology can be safely incorporated into critical financial infrastructure in a regulated way," said Silvio Pegado, Managing Director of Ripple for Latin America.
NEXT STEPS
Once the mirroring phase is validated, the partnership envisions gradually expanding blockchain use to native asset issuance and to trading among authorized participants. Assets under consideration for the next phases include Real Estate Receivables Certificates (CRI) and Agribusiness Receivables Certificates (CRA), significant segments of Brazil's fixed income market.
The platform's evolution will also include advanced confidentiality mechanisms to meet the privacy requirements of the financial market. Although the initial focus is on Brazilian assets and institutions, the model was designed to allow future expansion to new asset classes, new participants and, potentially, other international markets.
"Taking part in this initiative allows BTG Pactual to contribute directly to applying blockchain technology to the fund market, within a regulated infrastructure and with live transactions. Mirroring fund shares creates a concrete foundation for future developments while preserving current processes and the official record of the assets," said Luis Furtado, Partner at BTG Pactual responsible for Market Infrastructure.
ABOUT RIPPLE
Founded in 2012, Ripple is the leading provider of blockchain solutions rewiring the global financial system. With over 85 licenses, Ripple provides a single trusted entry point for enterprises with payments, custody, prime brokerage and treasury management solutions. Ripple’s stablecoin, RLUSD, and the digital asset XRP underpin these capabilities, enabling Ripple and its customers to bridge the worlds of traditional and digital finance.
ABOUT CSD BR
CSD BR is a financial market infrastructure authorized by the Central Bank of Brazil to provide registration, depository and settlement services, and by the Brazilian Securities and Exchange Commission (CVM) to provide registration and depository services. With high processing capacity and automation, CSD BR uses cutting-edge technology to deliver security, efficiency, transparency and robustness to the Brazilian financial market.