As of May 9th 2019, RealT— a new real estate tokenization platform— has officially launched. The company will initially start with residential property in the city of Detroit, and plans to extend to other cities throughout the year.
The Launch of RealT’s Tokenization Platform Explained
RealT aims to tokenize real estate assets. Eventually, the company wants to function as a marketplace for homeowners wishing to tokenize their own real estate.
According to RealT CEO Rémy Jacobson, the real estate market can significantly benefit from the advantages of Distributed Ledger Technology (DLT):
“The real-estate market desperately needs a shake-up, with current limitations including laborious documentation processes, siloed markets, and high costs all acting as barriers to entry to investment, particularly for those living in other countries.”
Tokenization, he says, can simplify the currently complex process of buying and selling real estate, while also bringing new levels of liquidity to real estate assets:
“We believe tokenization enables a worldwide marketplace for real estate investment, and it is the next step in the evolution of the industry.”
While operating on the Ethereum blockchain, RealT functions under a Delaware series limited liability structure. Each series is treated a separate legal entity.
Investments through the platform will only be open to accredited investors.
Real Estate Tokenization and Security Tokens Explained
The tokenization of real estate assets demonstrate just one facet of blockchain’s latest implementation: security tokens.
Since they deal with regulated, real-world assets, compliant security tokens abide by the appropriate governing bodies’ laws and regulations, while still unlocking new levels liquidity, eliminating unnecessary middlemen, and drastically shortening settlement cycles.
Thus far, security tokens have been implemented in assets to include equity, real estate, investment funds, and even fine art.
Some have argued that the benefits seen in blockchain technology will eventually lead to the tokenization of the entire traditional financial securities sector, valued at $544 trillion.
What do you think of the launch of RealT? Will real estate be the first asset to see notable levels of tokenization? Let us know what you think in the comments section below.
Image courtesy of Bankrate.