Brazilian Depository With $4.2 Trillion in Assets Taps XRP Ledger to Mirror Fund Shares

CSD BR, a Brazilian central securities depository with more than 22 trillion reais (about $4.2 trillion) in registered assets, will begin keeping a copy of fund ownership records on the public XRP Ledger, the company and Ripple announced on Tuesday.

The companies said it is the first time a central securities depository will use a public blockchain to mirror who owns which securities. Silvio Pegado, Ripple’s managing director for Latin America, called the shift from “pilots and proofs of concept to a live record-keeping infrastructure in a national capital market” a milestone for the industry.

The first phase covers shares in BTG Pactual investment funds held at CSD BR. Those shares will be tokenized with the XRP Ledger’s Multi-Purpose Token (MPT) standard, and authorized participants can check the onchain copy against the official records “in near real time,” according to the release. CSD BR’s own systems stay the official record for registration, deposit and settlement.

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Only corporate and banking clients in Brazil that pass know-your-customer and anti-money laundering checks can use the permissioned setup. CSD BR keeps control over issuing and administering the tokens, including approving participants, freezing individual assets and reversing transactions when a regulator or court orders it. Ripple provides the custody infrastructure.

The companies said the model needs no new regulatory approvals under Brazil’s current rules.

“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,” Daniel Polano Spreafico, CSD BR’s head of products and clients, said in the release.

After validating the mirroring phase, the partners plan to expand gradually into native issuance and trading among authorized participants. Candidates include two kinds of Brazilian fixed income securities: certificates backed by real estate receivables (CRI) and by agribusiness receivables (CRA).

“Mirroring fund shares creates a concrete foundation for future developments while preserving current processes and the official record of the assets,” said Luis Furtado, the BTG Pactual partner responsible for market infrastructure, in the release.

In May, Ondo Finance, JPMorgan’s Kinexys, Mastercard and Ripple completed a cross-border redemption of a tokenized U.S. Treasury fund on the XRP Ledger.

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