Tokenized assets are here to stay. The current race is about who can get regulated products to the market first and then who can successfully gain user adoption. While several projects have purported to tokenize real estate assets, blockimmo is the first to do it within the bounds of existing regulations in two jurisdictions.
The blockimmo platform launched recently with two test properties, but they intend to have actual real estate listed in the beginning of 2019.
The way blockimmo works is a real estate seller lists the property on the platform, along with an issuance of tokens which will represent shares of the property. Investors are then able to invest however much they like and watch the crowdsale progress. Various terms and limits can be placed on the sale. Once the sale is complete, each person who invested receives representative tokens in their wallet, tokens which are associated with a real-world holding by an investment firm in Lichtenstein.
We’ve heard this before. Several projects are working on similar goals, with regulations and government approval being the primary stumbling blocks. One that comes to mind is LA Token. TrustToken aims to do similar things in the future, as well.
The question of enforceability arises when there can be literally dozens of owners of a single property and the tokens can be swapped between wallets at will. To deal with this, blockimmo is limiting its operations to places where it is sure it can be fully regulated: Switzerland and Lichtenstein. They intend to expand to other parts of Europe as properties are successfully listed and the platform grows.
The properties that are sold on the platform, in a legal sense, are held by a Lichenstein firm, each with its own sub-fund. This is how the properties are secured in an IRL sense.
Switzerland is a great place to start a project like blockimmo because of the organization of its existing land registry. Founder Bastiaan Don said of this:
The properties we tokenise are already designated with the precise E-GRID number directly in the blockchain. This is already a known quantity in Switzerland and they are already entered as such in their own, centralised land register. Synchronising the systems would be a first step towards a land register on the Blockchain.
The big news last week for blockimmo was that FINMA, the Swiss financial regulatory body, had approved both their business model and their security token offering. This means they’re totally free to pursue their goals, and don’t have to worry about later running into problems with regulators. Swiss laws still apply to properties that are listed and exist within Switzerland, and there are various restrictions on foreigners investing in Swiss real estate.
FINMA announced this week that blockchain companies would be able to successfully operate in Switzerland with only minimal changes to its regulations.
The project has brought in a legal firm called MME to help it with legal issues that may arise, and also has the backing of family-run bank, Bank Frick, whose Director of Funds & Products, Raphael Haldner, said of the project:
The implementation of projects like blockimmo demonstrates the expertise of Bank Frick in the field of digital business models and products, as well our innovative drive.
Two example properties are live at blockimmo.ch so the public can see how the platform is intended to work. Real listings are expected to be happening as early as next month.
Featured image from Shutterstock.
Last modified: May 20, 2020 1:58 PM UTC