Crypto: This is how tokenization revolutionizes real estate

Recently, the real estate market has undergone a significant transformation due to tokenization. Based on cryptocurrency and blockchain, this technology allows real estate to be converted into digital tokens. This solution would open the doors of this market to a wider audience and also encourage better capital flow.

Understand how tokenization can impact the real estate market ⬇️https://t.co/l0dLJpvs7X

— Chainlink (@chainlink) January 18, 2024

Crypto: Real Estate Tokenization, a Market in Full Growth

Valued at 613 trillion dollars in 2022, the real estate market could reach 729 trillion dollars by 2028. Tokenization presents a solution to the lack of liquidity in real estate, as it guarantees faster and more simplified transactions.

Major financial institutions, like BlackRock and Franklin Templeton, have already started to issue tokenized US Treasury bills. This marks a turning point towards the acceptance of crypto assets in the real estate world.

Democratization and Globalization of Real Estate Investment Through Tokenization

Tokenization opens up the real estate market to small investors and disadvantaged communities through fractional ownership. This crypto solution makes real estate investment more accessible. Instead of acquiring an entire property, investors can buy shares in the form of tokens.

Tokenization allows investors to access markets beyond their geographical borders. Indeed, crypto tokens are not subject to the restrictions and traditional entry barriers of national real estate markets.

This opening of international markets offers investors greater diversification of their portfolios and more attractive investment opportunities. Crypto tokenization can thus contribute to:

• better allocation of capital on a global scale,
• more inclusive economic growth.

Improvement of Liquidity Thanks to Crypto Tokenization

Investors can trade their shares on secondary markets with greater ease and efficiency. This becomes particularly relevant in the current context where the commercial real estate market (CRE) has experienced a liquidity crunch following the interest rate hikes by the FED.

Despite its high potential, crypto real estate tokenization remains a recent and evolving field. A clear and appropriate regulatory framework is however necessary to ensure the security of investors and the protection of their rights in the world of cryptography.