When it comes to innovation in the global financial system, Brazil takes center stage once again, leading the way in the exploration of digital assets. The advancements in blockchain technology, the engagement of regulatory bodies, and the pursuit of a more efficient market contribute to shape an ideal environment within the country. What remains is for companies to be ready to gear up for the array of possibilities that lie ahead in this emerging business arena. But how can you efficiently structure a digital assets team? 

This is a journey of learning and adaptation that calls for planning, cutting-edge technology, and a team of qualified professionals. The path involves continuous monitoring of market context and understanding blockchain's potential to address persistent issues and streamline the infrastructure of processes, which are currently fraught with obstacles and friction. 

However, the first step is to determine whether the technology can truly impact your business.  

Does blockchain actually solve your problem? What is the rationale behind tokenizing? Part of the benefits stem from the programmability of tokens and the legal enforcement through automated smart contract operations. “There's no point in using the technology in a stagnant way, without improving efficiency, adding value, or reducing costs. Right from the start, the project should be conceived to improve the current experience and create a network effect as adoption grows," argues Bruno Cavalin, Parfin’s Chief Commercial Officer (CCO). 

The perfect storm 

Alongside technical assessment, it's essential to examine the actions of key market players. Major global organizations already have entire units solely dedicated to digital assets. The landscape in Brazil is consolidating, particularly in the financial sector, with players emerging from a state of inertia to find a strategic path. 

"We're seeing a perfect storm forming in the Brazilian market, primarily driven by regulators," says Cavalin. The Virtual Assets Law, enacted in December 2022, which regulates the cryptocurrency sector in the country, the Regulatory Sandbox project by the local Securities and Exchange Commission (CVM), and CVM Resolution 175, which allows investment funds to trade crypto assets in regulated counterparts, are important markers of this advancement. 

However, no initiative is as decisive and impactful as Brazil's Central Bank's digital currency. “Drex is set to propel this wave of tokenization in the economy and will be the primary native instrument for settling blockchain transactions. As per the analogy drawn by BCB, it will serve as the Pix for capital markets. We believe that this innovation will spread to other sectors as well, leading to the emergence of purpose-specific networks in areas like automobiles, real estate, and beyond,” he points out. 

In June of this year, the Central Bank selected 16 proposals for the Digital Real pilot project, and Parfin was one of the few selected infrastructure players.

However, they are not the only active entities now. "Unlike Pix, Drex's blockchain infrastructure has limited exposure in regulated environments, and there is a lack of knowledge at all levels. So, in our view, the time to acquire this expertise is now. The consequences of delayed response have always carried a cost, but in this case, the situation is more complex," asserts Cavalin. 

As paradigms shift and a new legal infrastructure landscape unfolds, it's essential to build an internal pipeline of excellence with professionals boasting multidisciplinary skills. “While there are challenges yet to be overcome, having regulators pushing forward makes the path clearer. It's no wonder that so many banks are already making headway in this new framework," he remarks. 

The best team 

To build the team responsible for overseeing the strategy for digital assets, the company must clearly define the team's roles. Cavalin describes the digital asset domain as an umbrella that encompasses the pillars of crypto and asset tokenization. Both can be leveraged for B2B, B2C, and B2B2C solutions. 

The system has a multitude of ramifications, ranging from offering crypto services and tokenizing real-world assets (like cars, vehicles, and artwork) to NFTs (focused on benefits), and extending to financial securities and unstructured market assets such as carbon credits, receivables, and legal claims.

"Looking ahead, banks will play a crucial role in the operation, storage, and distribution of digital assets, providing a comprehensive 360-degree outlook that consolidates the customers' new digital lifestyle. This is what we call "Custody 3.0", where the institutions will handle the custody of crypto and new tokenized assets while also offering additional value-added services derived from that," says Cavalin.

"Some are leveraging market technologies such as Crypto as a Service (CaaS), Custody and Permissioned Blockchain Networks, like the solutions provided by Parfin, while others prefer to develop this infrastructure in-house." 

"The issue is that starting a venture of this nature from scratch is quite complex and time-consuming. Each blockchain operates differently, with its own mechanisms. Parfin is heavily invested and has on board a top-tier global team that includes cryptographers and PhDs who are constantly diving into these subjects," he illustrates. 

Once these core pillars are defined, he advocates that the team consist of professionals skilled in different roles. "You need professionals with technical skills in web3 infrastructure, cybersecurity, product teams (Crypto and Tokenization) who will design new customer journeys, and experts in regulatory matters," he lists.

"From there, the goal is to assemble a team that meets specific demands: how will you integrate this into your existing business? And how will you ensure interoperability between existing legacy systems and the new tokenized environment? Take bank accounting reconciliation as an example," he asks. 

The next step involves testing and consolidation. Cavalin suggests the team should develop solutions within controlled environments (Labs), where they can implement innovations, assess their effectiveness, and optimize workflows for efficiency. 

"We've crafted a pragmatic approach for testing business hypotheses, optimizing models, and scaling once all angles have been validated. Our mission is to help organizations tackle this disruption and reshape their businesses through a sound digital asset strategy. The world will run on blockchain rails, the sooner institutions embrace this revolution, the more relevant they will be to society," concludes Cavalin.  

Need help shaping your digital asset journey? 

Parfin is here to assist you!