According to a report prepared by Security Token Market and its associated company Security Token Avisor, the tokenization of real estate has been gaining more and more prominence in the real estate market.
The report, which was presented by Cointelegraph Research Terminal, covers the new trend of asset-backed real estate tokenization, which is nothing more than, transforming a real estate asset into a token (unit of value), which is then transformed into a digital asset (cryptocurrency).
The study highlights the increase in investors seeking more and more, to make safer investments using emerging technology, the search for investment opportunities supported by the blockchain and backed by real-world assets, they also point out that real estate assets represent more than 40% of the portfolio of certain technology providers in the industry.
Under this line, the CEO of Che Token, Álvaro Castro Burgueño expressed his opinion on the matter:
“Real estate will change dramatically as a result of the token boom. In the past, buying and selling property has always been a complex and time-consuming process. With the help of tokens, this will be a thing of the past. Instead, users will be able to perform purchases and sales through simple and secure transactions, without having to go through a third party,” said the specialist.
In addition, he explained what this new trend of tokenization is about, and the multiple applications, where it can be implemented, such as real estate, automobiles, works of art, securities and other basic products, he highlighted.
Adding that: “Tokenizing an asset makes it easier for buyers and sellers to transact securely online without involving third parties like banks. This reduces the costs associated with traditional methods, such as escrow accounts and credit checks, which add unnecessary delays to transactions and cause property rights disputes.”
For its part, Koinbanx, a company based on financial tokenization, thinks that Blockchain technology favors financial inclusion, since it offers lower costs, transparency when carrying out operations, among other benefits.
“Blockchain technology, or chain of blocks, collaborates strongly with financial inclusion, mainly because it directly transforms the way in which financial transactions of remittances, savings, credit, insurance, payments and transfers can be initiated, authorized and processed. This translates into lower costs, greater transparency and faster terms without compromising the security of the transaction”,said Leo Elduayen CEO and Co-founder of Koinbanx.
An agile and safe trend
It should be noted that there are currently several companies in the real estate industry that create tokens that represent properties under construction.which are then put up for sale, to raise capital, with which they can continue the work.
“Tokenization of real estate is currently being used in a number of different ways. One example is the sale of property rights. This happens when a property is sold in token form, rather than as a traditional real estate investment. This is one more way safe and transparent way to sell the property, since the buyer knows exactly what he is buying”, explains Álvaro Castro Burgueño.
Ensuring that The main benefits of tokenization are that they allow greater liquidity and security for the owners of the property, in addition to the easy access to investors to the asset and the financing obtained by real estate companies.
Is real estate tokenization safe?
Since April 2021, the Argentine Real Estate Chamber (CIA) offers courses to train developers, builders and real estate companies. Aimed at providing them with tools so that they can accept “payments in cryptocurrencies and be able to triangulate digital money” without friction or problems, thus guaranteeing the security of transactions.
Being a market that is still relatively new, real estate agencies also accept mixed payments: a part in cash and the remaining percentage in stable cryptocurrencies, thus ensuring that the operation is successful.
Disclaimer: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information set forth herein should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
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