How tokenizing real estate can turn the ‘rules’ on their head – by mastering them first
The digital asset space is ripe for regulation, and tokenized real estate is no exception. But views differ when it comes to finding a framework that fits.
“But if you’re referring to tokenization by taking an asset and issuing a security backed by that asset, that’ll be similar to a collective investment scheme where investors’ money is pooled by virtue of acquiring the tokens and returns are based on the return of the asset, and therefore will most probably be subject to securities law,” Wong said, noting the compliance burden such law entails and securitized property tokenization’s parallels with real estate investment trusts (REITs), which are typically subject to numerous restrictions and requirements.
Ngo said that DeFi real estate tokens not governed under securities law – which were so far scarce – would nevertheless require a new and dedicated regulatory framework to reach their full market potential.
Right. Also, this idea is not wholly new. Some years ago there was a UK website dealing in shared ownership of property to accumulate rent. I really can't remember the name of it, and was not related to any blockchain, anyway, worked well, but the process was slow and, I think, the various fees rather ate into the rental profits. I made a bit of money and the project wound down properly.