Tokenization in real estate is an “inevitable next chapter in blockchain’s disruption of capital markets,” and could make major progress in the next five years, according to a report published by Moore Intelligence on Wednesday.
- The emergence of new secondary markets for digital property assets might mean more liquidity, efficiency and lower costs for investors, the report noted.
- “Tokenization has potential to drive down transactional costs and improve efficiency via the use of ‘smart contracts’ which can replace copious paperwork and laborious administration,” according to the report.
- Institutional investors still largely remain on the sidelines waiting for more regulatory clarity, the report said.
- “From an audit perspective, adding digital assets to a portfolio can be advantageous as blockchain technology can make transactions more transparent and trackable,” David Walker, a managing partner at Moore Cayman, wrote in the report.
- Texas-based commercial real estate marketplace Red Swan had tokenized $2.2 billion in real estate through security token platform Polymath, and it had another $4 billion in properties in the tokenization pipeline, CoinDesk reported in February 2020.
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