B3 to Launch Bitcoin-Linked Prediction Contracts as Brazil Bans Polymarket and Kalshi

Key Takeaways:

• B3 launches six Event Contracts connected April 27, with bitcoin among 3 underlying assets.
• CMN Resolution 5,298 bans sports and governmental prediction derivatives starting May 4.
• ANATEL has blocked 28 prediction market platforms including Polymarket and Kalshi.

Brazil Draws a Regulatory Line Between Asset and Event Derivatives

B3’s six Event Contracts are tied to spot and mini futures movements successful the Ibovespa index, the Brazilian real, and bitcoin, with prices capped astatine 100 Brazilian reais (around $19) and currency colony only. The contracts trust connected the aforesaid mechanical operation utilized by U.S.-based prediction market operators Kalshi and Polymarket, and they person been authorized by Brazil’s securities regulator, the Comissão de Valores Mobiliários (CVM). They are restricted to nonrecreational investors with astatine slightest 10 cardinal reais (approximately $1.9 million) successful assets oregon holding CVM method certification.

The motorboat lands 3 days aft the Conselho Monetário Nacional (CMN), Brazil’s apical monetary argumentation body, published Resolution CMN nº 5,298 connected April 24. The solution prohibits derivatives based connected existent sports events, online games, and political, electoral, social, cultural, oregon amusement events, portion preserving derivatives tied to economical and fiscal variables. The rules instrumentality effect May 4, with enforcement and complementary regularisation delegated to the CVM.

At a property league the aforesaid day, Finance Minister Dario Durigan and Civil House Minister Miriam Belchior announced that Brazil’s National Telecommunications Agency (ANATEL) had blocked entree to 28 prediction market platforms operating without authorization, with Secretariat of Prizes and Bets (SPA) caput Régis Dudena confirming further blocks would travel for immoderate platforms extracurricular the CMN’s permitted scope.

The solution explicitly cites Brazil’s national sports betting model arsenic the ineligible ground for distinguishing licensed fixed-odds betting from event-based derivatives. The Instituto Brasileiro de Jogo Responsável, an manufacture commercialized assemblage for licensed Brazilian operators, endorsed the resolution the aforesaid day, framing it arsenic preventing “regulatory arbitrage” by overseas platforms attempting to run arsenic fiscal instruments alternatively than licensed gambling operators.

Founded successful 2017 from the merger of BM&FBovespa and Cetip, B3 (Brasil, Bolsa, Balcão) is Brazil’s main banal speech and the largest fiscal marketplace infrastructure relation successful Latin America. B3 already offers Bitcoin futures contracts, launched successful April 2024, alongside derivatives tied to equities, currencies, commodities, and involvement rates.

This motorboat is the archetypal federally regulated prediction marketplace successful Brazil per the company’s ain framing and arrives precisely connected the close broadside of the caller line. TK root connected this According to Luiz Masagão, B3’s Executive Vice President of Products and Clients, the contracts signifier portion of a broader strategy to modernize the country’s derivatives market, with B3 already offering instruments linked to cardinal slope decisions successful different jurisdictions.

The speech has separately disclosed plans to motorboat a tokenization level and stablecoin earlier year-end, Bloomberg reported earlier this month. The motorboat comes amid a planetary prediction market boom, with Kalshi having entered Brazil successful January via a concern with brokerage XP International. With Polymarket, Kalshi, and 26 different overseas platforms present blocked astatine the web level, B3 enters a home marketplace the authorities has cleared connected its behalf, with tens of billions successful notional volume up for grabs.