Why you need to use blockchain in your real estate business?
FAQ § 11/29/2022 Reading time: ~4 minutes
Blockchain is needed where the speed and reliability of data transfer are important, especially in real estate. Application blockchain can play a big role in the real estate industry. This could eliminate the need for intermediaries, increase trust between the parties to the transaction, keep records, speed up all processes, increase liquidity, reduce fraud and reduce costs and fees. This is a breakthrough! Blockchain platform technology can be applied to many aspects of the real estate business. Here are some of them worth paying attention to: Ownership The real estate blockchain can be used as the only source of truth to verify ownership of assets. This includes partial ownership through the token, and all holders of these tokens will be public. Land ownership Traditionally used offline, blockchain technology allows the storage and verification of important real estate legal documents. Leasing Blockchain-based smart real estate contracts will not only speed up the leasing process and save on costs but can also improve due diligence identity verification and simplify contract signing. Liquidity If an asset is tokenized for 1000 investors instead of 10, you automatically increase the liquidity of that investment. If it is easier for buyers and sellers of tokens to sell and buy stakes in a particular asset, then exit strategies and liquidity problems are greatly reduced. Transactions The entire process of a real estate transaction such as the submission of a proposal, the verification of ownership, the acceptance and verification of that proposal and the funding. All of this can be verified and codified in a sort of digital ledger. Financing Credit checks, proof of income and identity, debt-to-income ratio, and more could be stored and verified using the blockchain. Blockchain is needed where the speed and reliability of data transfer are important, especially in real estate. The token is a store of value in real estate. In a residential or commercial real estate blockchain, tokens represent an ownership interest in various classes such as equity, debt, or cash flow. For example, if a 100-unit apartment building is owned by 50 different blockchain-protected investors, each of these investors can own tokens to reflect their ownership in the equity of that asset. In this example, a real estate blockchain platform can be used to document, store, and verify these tokens. The tokens can then be easily sold or liquidated. The real value of the blockchain lies not only in trust and efficiency but also in liquidity. Blockchain will have the ability to verify identity and income, as well as reduce the likelihood of fraud. Additional factors to consider when tokenizing property in different countries: — Approval from the Securities and Futures Commission ( SFC ) in Hong Kong is required. They will issue an operating license. Security tokens are considered complex financial products. — The Monetary Authority of Singapore ( MAS ) considers securities as a product of the capital market and offers a capital market license for this purpose. — In the UAE, property tokenization is regulated by the Securities and Commodities Authority ( SCA ). — In the US, real estate tokenization is the responsibility of the Securities and Exchange Commission ( SEC ) and the Financial Industry Regulatory Authority ( FINRA ). — Switzerland has a Financial Market Supervisory Authority ( FINMA ) that deals with the trading, custody, and settlement of digital assets. What are some examples of the use of blockchain for real estate? At the end of November 2019, DLT Coadjute announced a deal with Natwest Bank to enable the bank's users to control their home purchases through an app. Local construction giant Cyrela Brazil Realty has partnered with startup Growth Tech to bring the project called Notary Ledgers to fruition. It allows you to request and track notary services digitally. It helped the developer significantly reduce the time for selling real estate - from 30 ordinary days to 20 minutes. One of the largest banking groups in Japan, Mizuho Trust & Banking, plans to carry out real estate tokenization and sell security tokens to investors by the end of the year. Outcome Great progress has been made in real estate tokenization in countries such as the US, Switzerland, Singapore, Hong Kong, Japan, and Germany. This allows efficient allocation of resources. Wider adoption of blockchain technology and progressive regulations will drive demand for tokenization. Do you want to use a blockchain in your real estate business? Contact us , and we will make sure that your affairs are repaired properly.