Tokenization of private securities in Latin America: legal architecture for broadening access to private capital market

This article examines the legal architecture required to enable the tokenization of private securities in Latin America, with a particular focus on Colombia and comparative references to Mexico, Spain, and Brazil. Tokenization — the process of representing ownership rights over financial instruments through distributed ledger technology (DLT) — offers the potential to modernize private placements by enhancing liquidity, compliance automation, and transparency. The article situates tokenization within the broader evolution of financial infrastructure, drawing from doctrinal sources, international regulatory frameworks (MiCA, DLT Pilot Regime, CVM Resolution 175, Fintech Law), and functional analyses proposed by institutions such as DTCC, ISDA, and the World Economic Forum. It argues that while existing private offering regimes can accommodate tokenized instruments without wholesale legislative reform, legal certainty requires functional regulation that recognizes smart contracts, digital custody, and programmable compliance mechanisms as valid components of securities law. The article concludes that a principles-based, technology-neutral approach—centered on trust, reliability, and clarity—can allow Latin American markets to expand access to capital and attract cross-border investment while maintaining robust investor protection and market integrity.

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