BRL stablecoin reward program vs security: the difference
How the BRLV Rewards Program differs from a security: a loyalty program for qualified holders, not a financial product, with points, redemption and tax rules.
The BRLV Rewards Program is a loyalty program, not a financial product, and BRLV is not a security. BRLV is the stablecoin issued by Crown, pegged 1:1 to the Brazilian real. This page sets out what Crown documents about the program and about the legal nature of the token. The regulator that Crown identifies for BRLV is covered in who regulates a Brazilian real stablecoin: the Central Bank, not the CVM.
What is the BRLV Rewards Program?
It is a loyalty program exclusive to qualified clients who hold a BRLV balance. By holding BRLV in a wallet, the client accrues points every business day, in proportion to the balance and to the time it stays in the wallet. While participating, the client keeps liquidity and the principal in BRLV always available to move. The token itself is not remunerated: 1 BRLV is always worth R$ 1.00.
Is BRLV a security?
No. BRLV is not a valor mobiliário (security under Brazilian law). It is a virtual asset under Law No. 14,478/2022, and the competent authority over Crown’s activity is the Central Bank of Brazil, not the CVM. Crown states that this understanding is supported by independent legal opinions it obtained.
Are the points a form of financial remuneration?
No. The points are not interest or financial remuneration. They are benefits of a loyalty program. Participation does not create any right of the client over the reserve assets or over their results, and the program is funded by Crown and can be adjusted under its terms.
Where does the reserve income go?
The reserves behind BRLV are invested entirely in Brazilian federal government bonds (LFTs, or Tesouro Selic), which generate profitability at the reserve layer. Crown’s economic model converts most of that profitability into points for BRLV holders who take part in the program, net of a management fee that covers the operating costs of the structure.
How does the program work step by step?
First, the client opens an account and completes identity verification (KYC or KYB). Second, the client deposits reais through Pix or USDC. Third, the client converts the balance into BRLV at R$ 1.00 per BRLV. Fourth, at that moment the client receives the Crown Reward Token at no cost. Fifth, points accrue daily according to the BRLV balance in wallets registered with Crown, including external wallets. Sixth, when the client chooses, they redeem the points by selling the Reward Token for the equivalent value, and receive BRL, BRLV or partner products, through Crown’s interface or by API. One point equals 1 BRLV, or R$ 1.00.
What is the accrual rate?
Points accrue every business day in proportion to the BRLV balance, and the rate varies with the pricing of the federal bonds that back the token. The current rate and the program conditions are available to registered clients through Crown’s official channels.
How is the program taxed?
Selling the Reward Token for more than its acquisition value (always R$ 0.00) may be a capital gain for Brazilian income tax purposes. The client is solely responsible for determining, declaring and paying the applicable taxes, and Crown does not provide tax, legal or financial advice. The risks Crown describes for holding BRLV are in what are the risks of holding a Brazilian real stablecoin?.