Commercial Real Estate (CRE) Tokenization?
What You Need To Know
The blockchain is an immutable distributed ledger technology in which transaction data is recorded. Its benefits include transparency, traceability, accessibility, enhanced security, cost reduction of processes, and irrevocable documentation of the processes.
The ability of Blockchain-based processes in executing transactions without an intermediary or a clearinghouse very much suits a private market like real estate. The distributed ledger holds a history of a transaction, a property, an asset, or a title; it develops a digital secure identifier for a proposed transaction; and it offers an ability to transfer funds in new ways, for example using a digital encrypted (or crypto-) currency such as Bitcoin.
Blockchain in real estate, therefore, can eliminate the need for intermediaries like lawyers and agents by providing a means of property verification and payment to buyers. Paying for a property using cryptocurrencies can also help buyers bypass bank fees. It cuts the fees associated with escrow by using smart contracts that can be customized according to users’ needs. The technology could also make it easier and provide more accurate deed transfers, improve transparency issues in investing and lastly, speeding up MLS (multiple listing services) listings.
The tokenized nature of cryptocurrencies makes crowd ownership and fractional sales of real estate possible.
Average Joe and Jane might not be able to afford whole properties or even have access to Commercial Real Estate offerings. Transferrable and tradable tokens, representing shares and ownership, the new liquid way for property and landowner to sell or enable growth-financing, accessible to a broader investor crowd.
Innovation for Real EstateATO (Asset Token Offering), STO (Security Token Offerings), DSO (Digital Securities Offerings), or TAO (Tokenized Asset Offerings) allow firms, projects or property owners to crowdfund real estate development using cryptocurrency by tokenizing assets.
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