CVM Resolution 88: Complete Guide to Securities Tokenization in Brazil

1. What is CVM Resolution 88

CVM Resolution 88 regulates public offerings of securities made with registration exemption, distributed exclusively through investment crowdfunding electronic platforms.

In practice, it creates a simplified path for small-sized businesses to raise capital from investors without going through the exhaustive registered public offering process at the CVM — which involves detailed prospectuses, external audits, and costs that would render smaller operations unviable.

The CVM adopts a technology-neutral stance: the resolution does not explicitly mention blockchain or tokenization, but recognizes that tokens can represent securities when they possess the economic characteristics defined by law. The practical outcome is that tokens issued as securities on a blockchain can be offered under the CVM 88 framework, provided the operation respects all of the regulation's limits and requirements.

2. Who Can Issue Under CVM 88

The resolution defines eligible issuers as small-sized enterprises with an annual gross revenue of up to BRL 40 million in the previous fiscal year. This encompasses a broad range of businesses, from early-stage startups to established mid-market companies.

With the review proposed for 2026, the CVM is expanding the list of eligible issuers to include:

• Closely-held securitizers not registered with the CVM, which will be allowed to issue CRAs and CRIs within the crowdfunding platform with backing from agricultural and real estate receivables.
• Cooperatives of credit and production.
• Individual rural producers (natural persons), who can offer CPRs (Certificate of Rural Product) directly on the platforms, opening a direct harvest-financing channel without banking intermediaries.

This expansion transforms CVM 88 from a startup regulation into a cornerstone of the Brazilian structured credit market — directly impacting the agribusiness and real estate sectors.

3. Funding Limits: Current Regulations

The current CVM 88 limit is BRL 15 million per offering, with a maximum funding period of 180 days. This limit was defined in 2023 and remains in effect while the active 2026 revision is completed.

CVM's own data provides context: 75% of offerings conducted up to June 2025 had capital raising of less than BRL 5 million, 22% were between BRL 5 million and BRL 10 million, and only 3% exceeded BRL 10 million. This means that the BRL 15 million cap is rarely hit in practice; the market operates in smaller volumes.

The 2026 revision proposes increasing this limit, though the new specific cap has not been officially declared yet. The public consultation process initiated in September 2025 is underway, and the CVM is expected to publish the updated norm during 2026.

For companies planning raises above BRL 15 million, the current pathway is a registered public offering with the CVM — with prospectuses, independent audits, and a regulated general manager. Tokenization remains fully possible in that format, but with higher costs and longer timelines.

4. How a CVM 88 Offering Works in Practice

A funding round via CVM 88 involves three main parties: the issuer, the platform, and the investors.

The issuer is the capital-seeking company. It defines the target amount, the deadline, the type of security, and the return or equity conditions offered to investors.

The platform is the regulated intermediary. Only platforms accredited by the CVM can distribute offerings under Resolution 88. They are responsible for investor KYC, reviewing issuer documentation, and risk communication. There is no direct public issuance without a platform.

The investors access offerings through the platform and face annual investment limits defined by the rule — with different ceilings for qualified and non-qualified investors.

When the offering is tokenized, the token representing the security is minted on a blockchain with a smart contract that hardcodes the rules for yield, transfers, and redemptions. Settlement can occur in Brazilian Reais or, in more advanced structures, via stablecoins under the BCB 521 framework.

5. CVM's Functional Test: When a Token is a Security

The CVM does not classify tokens by their technical form — it classifies them by economic substance. The functional test applied by the regulator evaluates four elements:

4. Managed by third parties: The expected returns derive from the efforts of the issuer or their team, rather than the investor's own active work.

If a token meets these four criteria, it is classified as a security regardless of the label used. This has an important legal consequence: issuing utility-labeled tokens with yield promises without registering them under CVM 88 or standard offerings is an irregularity, subject to CVM penalties.

6. What the 2026 Review Changes for Tokenization

The revision of CVM 88 was proposed in September 2025 to scale with the growing market, include securitizers, cooperatives, and individual farmers, expand funding limits, and explicitly align the rules with technologies like tokenization.

Three main developments of the review impact token operators directly:

• Explicit recognition of tokenization: The new rules will include specific references to tokenized securities, providing additional legal safety for operators who previously worked purely on interpretation-based structures.
• Secondary market mechanics: The revision foresees buyback mechanisms for issuers and updates to the active investor concept — structural shifts that facilitate secondary liquidity for CVM 88 tokens.
• Support for rural producer individuals: Allowing direct CPR issuances on electronic platforms opens up a massive tokenized ag-credit market in Brazil to disintermediate banking.

7. What Companies Need to Verify Before Issuing

Before launching a tokenized raise under CVM 88, four checks are mandatory:

• 1. Verify eligibility: Ensure actual annual gross revenues are below BRL 40 million. Larger companies must use standard registered offerings.
• 2. Define token classification: Confirm if the token features trigger the CVM securities functional test. Off-grid launches can invite regulator actions.
• 3. Select an approved platform: Distribution must run through a CVM-certified platform. The official CVM directory lists all active platforms.
• 4. Align smart contracts with final legal terms: Smart contract code must perfectly replicate the economic terms in the binding offering documents.

8. How Avalon Structures CVM 88 Operations

Avalon advises companies looking to issue tokens as securities under CVM 88 — guiding clients from general eligibility diagnostics to post-issuance monitoring. Our workflows cover:

• Legal & Regulatory Advisory: Assisting in eligibility analysis, securities characterization testing, coordination of prospectus/offering documentation with top-tier capital markets attorneys.
• Technical Architecture: Ground-up selection of the ideal blockchain framework, robust smart contract development, and independent audit coordination.
• Platform Matching: Identifying and negotiating with CVM-certified crowdfunding platforms to distribute the asset seamlessly.

9. FAQ About CVM Resolution 88