Asset Tokenization of Real Estate in Europe

Abstract

The real estate industry is one of the most important and oldest asset classes in the world. It is also one of the most inefficient and inflexible ones. This paper explores a disruptive technology that could solve fundamental problems within the real estate market. With the advent of blockchain technology, and therefore the concept of tokenization, two major possibilities have arisen: first, the fractionalization of assets or any claims; second, the digital representation of asset ownership. The former feature has the potential to enable access to any investor to realize real estate investment opportunities. This could lead to a more democratized investment environment and greater liquidity. The latter aspect opens up room for real innovation by displaying asset ownership on a digital platform. This paper presents current use cases of blockchain application in the real estate industry. To further verify the business feasibility, it will provide insights gained through industry experts and real estate tokenization company representatives. According to the results, the concept will most probably disrupt the current real estate market and lead to major shifts in revenue and asset ownership in a digital environment. The paper identifies current challenges and hurdles that are yet to be overcome in order for blockchain technology to fully mature in this particular market.KeywordsDistributed ledger technologyAsset tokenizationBlockchainSurveyReal estate technology