As a result, the tokenization or digitization of financial assets can be carried out in an integral, consistent, and predictable manner.

"This is why we say that smart contracts are the bridge between the world of finance and the crypto ecosystem,"

The technology has the potential to revolutionize the way financial transactions are conducted. Below, we highlight the use cases where it has the potential to implement significant advancements.

Tokenized Investment Products

Today, major financial institutions in Brazil are already studying the additional revenue gains or cost reduction that the digitization of assets can generate. This reality reflects the ability of smart contracts to handle different logics and factors within the same contract.

The technology can record all stages of negotiation of financial assets consistently and securely. This enables the tokenization of public and private securities—such as debentures, Real Estate Receivables Certificates (CRIs), or Agricultural Receivables Certificates (CRAs), for example.

In addition to this predictability, smart contracts promote system agility, calculating in milliseconds how much return the investor should receive for a specific asset. Then, the purchase and sale of the security are automatically executed on the network.

"When the parties agree, the negotiation can take place at any time during the investment, even before the maturity date. It is no coincidence that smart contracts have the potential to expand the secondary market,"

Advantages of Smart Contracts

The automation of these processes and increased security can bring significant gains in operational efficiency. Some of the key advancements include continuous automatic financial settlement, in 24/7 mode, and the creation of specific automations for different market segments.

Another point is the ease of tracking contracts with tokenized assets. When gathered on the same network, financial institutions can evaluate data in a panoramic manner, optimizing credit analysis and simplifying, for example, the collateralization process.

Pilot Project of Banco BV

Banco BV, whose main business is vehicle financing, is already exploring ways to use smart contracts to streamline various stages of this process. Parfin provides the entire infrastructure for the project.

"We are fitting the bank's operation into the blockchain to promote agility and cut costs. The goal is to create an autonomous system capable of approving credit and packaging these debts for negotiation in the secondary market."

The expert emphasizes that although the technology has the ability to create solutions automatically, its use is centered on issues involving predictability.

"It is not possible, for example, to use smart contracts to manage and organize databases. The system must receive already analyzed parameters to run efficiently,"

Brazil at the Forefront of Technology

The Brazilian market is one of the most advanced globally when it comes to asset tokenization. This is because the Central Bank follows global changes and promotes an innovation agenda that has already resulted in significant progress—such as Pix and Open Finance.

Now, by placing tokenization at the center of innovation efforts with Drex—digital real—the financial authority encourages the entire sector to follow the same path.

Legislation supports this movement. Today, discussions on Law No. 14,478/2022—known as the "crypto law"—are progressing in Congress. In parallel, the CVM (Brazilian Securities and Exchange Commission) stays close to the topic to formulate parameters that enable the regulation of digital and tokenized assets.

"The market should take a leap with the implementation of digital real. We project that in five years, the majority of financial market assets will already be tokenized in Brazil," says Conrado.