Tokenized assets have been on the rise this year and cryptocurrency companies are taking advantage of the rise in their demand. There is a race between companies regarding who can get regulated products to the market first and also successfully gain user adoption of the products. Even though there have been numerous projects presented to tokenize real estate assets, blockimmo is the first one to tokenize the assets in a regulated manner.
Blockimmo launches world’s first regulated real estate tokenized assets
The Swiss-based company recently launched two test properties with the aim of listing actual real estates on their platform early next year. The way the platform works is easy. Real estate sellers get to list their properties on the platform and will get issuance of tokens. These tokens will stand for shares of the property. Investors will be given the opportunity to invest as much as they like in that property, with terms of purchase and limits attached to the property. Once the sale has been completed, the investors will receive tokens representing their investment. The tokens are associated with a real-world holding by an investment firm based in Lichtenstein.
This isn’t the first time a project similar to this has been launched. There are numerous companies that are currently working on similar goals through government regulations and approval have presented them with some challenges. The LA Token is looking to offer similar projects in the future.
Blockimmo only available in Switzerland and Lichtenstein
There is a problem of enforceability due to the fact that there could be dozens of owners of a single property and the tokens can be transferred between wallets. To ensure that this problem is not encountered, blockimmo has limited its operations to jurisdictions where it can be fully regulated. At the moment, the platform is just available for investors in Switzerland and Lichtenstein. Blockimmo is, however, looking to expand its operations to other parts of Europe once the platform attains the growth it expects.
The company in its press release stated that the properties to be listed on the platform are held by a firm in Lichtenstein legally, with each property with its own sub-fund. This method of operation is how the properties are secured in an IRL sense. For companies looking to start a similar project, Switzerland is regarded as a preferred destination due to the presence of the land registry in the country.
Founder of Blockimmo Bastiaan Don commenting on this stated that “The properties we tokenize 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, centralized land register. Synchronizing the systems would be the first step towards a land register on the Blockchain.”
Last week, FINMA, the Swiss financial regulatory body, approved the business model of blockimmo and their security token offering. With these approvals, the company will be able to freely pursue their goals as they would not have to bother with encountering any problems with regulators in the country. The laws in the country apply to properties that are listed or exist within Switzerland. However, there are various restrictions on foreigners investing in the real estate business in the country.
The regulatory body announced earlier this week that blockchain-based companies would be given the opportunity to operate in the country with minimal changes to their current regulations.
Blockimmo has hired a legal firm called MME to assist them with legal issues that might be encountered. They also have the support of family-run bank, Bank Frick, with the Director of Funds & Products of the project, Raphael Haldner stating that “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.”
Blockimmo has presented two examples properties on their official website so that the general public can see how the platform is expected to work. The firm is expected to start the real listing of properties by next month.