![]() Additionally, no international regulatory framework currently exists. Security regulations vary significantly from jurisdiction to jurisdiction and may apply broadly not just to the creation and initial offering of tokens but also to trading on secondary markets. Regulatory uncertainty continues to pose the most significant impediment to real estate asset tokenization. Tokenization, by reducing or eliminating the costs of intermediaries and lowering minimum investment requirements, offers the potential to unlock trillions of dollars in illiquid global real estate assets to retail and institutional investors in an open marketplace. Post-Listing Support-ongoing support for investors and distributing profits or other rights to payment.Marketing and Distribution-advertising of the offering, confirmation of investor accreditation and listing of tokens on the exchange through a security token offering (STO) and.Token Creation-determination of the number and type of tokens and selection of an exchange platform.Smart Contract Generation-compliance with securities laws and the creation of a smart contract.Asset Identification-identification of the commercial real estate asset, which may involve its acquisition, financing and appraisal.Real estate tokenization generally follows a five-part procedure by the offeror: Amid increasing interest in technology applications for real estate assets, or “Proptech,” the industry recognizes that tokenization has the potential to revolutionize real estate transactions and disrupt established business models. Each token represents direct ownership of an asset, such as a parcel of real estate, a share in a company owning real estate, a participation in a real estate investment fund, property-related payment rights (such as dividends, distributions or a share of profits), or any number of potential derivatives. Tokenization is the process of representing a fractional ownership interest in an asset with a blockchain-based digital token. ![]() The development of blockchain-based smart contracts-self-executing software algorithms integrated into a blockchain with trigger actions based on pre-defined parameters-has made it possible for parties to automate the process of executing commercial transactions between counterparties in a more direct, trustworthy and efficient manner. Blockchain technology is a digitized, distributed ledger that immutably records and shares information using software protocols and advanced cryptology.
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