How Blockchain could change the landscape of real estate investing

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A growing number of countries have started the process of implementing functional and legal frameworks to regulate the chips registered in the blockchain in recent months, which has led to the growing exploration of these technologies in many countries. many sectors of investment.

In addition, the use of distributed ledger technology (DLT) is a powerful disruptive at the transactional level, where significant disintermediation is ongoing, particularly with one of the most popular alternative investments: real estate.

Much of the recent regulation – or steps in this direction – addresses the volatility and risk issues badociated with initial coin offerings (collectively, ICOs) and security token (STO) offerings.

For example, recent regulatory developments include:

• In July 2018, Malta promulgated the first global legislative framework for blockchain and DLT to regulate ICOs and OTS, including a reference platform and regulatory process.

• In December 2018, the Council of the European Union published the G-20 Declaration "Building Consensus for Just and Sustainable Development", summarizing the debates of the 13th meeting of the G-20 in Buenos Aires, Argentina.

• Following the G-20 declaration, seven European Union countries – the "Seven Mediterranean countries" – signed a declaration of cooperation in the field of blockchain and DLT technologies. Malta has taken the initiative to launch the declaration. The other signatories were Italy, Spain, France and Portugal. , Cyprus and Greece: this agreement obliges the signatory countries to promote technology and to work together in the blockchain area.

• Switzerland has also provided a framework dedicated to cryptocurrency, similar to the Isle of Man.

• The US Securities and Exchange Commission (SEC) continued to treat ICOs as securities until September 2018, after the SEC President sought clarification in an official letter, following A meeting in Washington attended by Wall Street representatives, venture capitalists and cryptocurrency companies. and the American Chamber of Commerce. A letter was prepared by the group and signed by more than a dozen members of Congress for the president of the SEC, which ultimately prompted four crypto-friendly bills to be submitted to Congress in early 2019 .

• South Korea and Brazil banned investments in country offices in 2018.

While many groups seek to refine and standardize the definitions of different types of tokens, much of this regulation recognizes that HTOs – which, unlike most ICOs, are protected by physical badets – could be the answer. the security and fraud issues of the ICOs. and other types of encryption tokens.

In addition, the STO raises reached a completion rate of 95% last year. In the end, this success and validation has led to broad acceptance of STOs in several sectors, including real estate.

Fractional real estate

The most important game changer will likely be to free up the liquidity of small investors by democratizing access, thanks to fractional real estate opportunities (FRE).

Since this investment clbad was previously only available to wealthy investors, real estate investment trusts (REITs), opportunity funds, investment vehicles managed by large banks or institutional investors, the symbolization of badets superior quality in FRE significantly reduces the barrier to entry, whose price corresponds to a single symbolic value, with no minimum investment limit or clbadic blocking period, offering investors a simpler and safer opportunity to acquire shares.

The data

The use of blockchain technologies is also changing the landscape of investment and real estate transactions through the use of DLT technology to create public, state and federal channel chains for all types of databases. real estate data, which increases accessibility, reduces takeovers, simplifies transaction procedures and reduces delays.

Universal regulatory acceptance

Although there is still much to be done in terms of universal regulatory acceptance – for example, China, India and several other countries have totally banned STOs in recent years – crypto tokens and the DLT are changing the investment process in the world's major real estate markets.

Expanding the use of DLT (title verification, evaluation, due diligence, insurance payment and settlement, smart contacts, construction tracking and material verification), combined with increased FRE STO opportunities, offers strong growth prospects for 2019.