DeFi
How DeFi is revolutionizing commercial real estate
8:16 a.m. ▪ 3 min reading ▪ by Mikaia A.
Decentralized finance (DeFi) continues to disrupt traditional economic sectors. With the tokenization of assets, it is poised to revolutionize commercial real estate. Kunal Bhasin of KPMG predicts a profound transformation thanks to this technology. Institutional investors could soon acquire shares of prestigious buildings via blockchain, making this market more accessible and transparent.
DeFi and tokenization of real estate assets
Decentralized finance (DeFi) is now establishing itself as a major catalyst in the commercial real estate sector.
According to Kunal Bhasin of KPMG, tokenization of assets would allow institutional investors to acquire shares in emblematic buildingslike the Eaton Center in Toronto.
This technology breaks down access barriers, historically reserved for large real estate funds and pension fund managers. DeFi makes ownership more democratic and offers new investment opportunities.
However, institutional actors prefer to operate in a regulated environment, where knowledge of stakeholders is crucial.
Slow but promising adoption
Even if the tokenization of real estate assets takes time to take hold, concrete examples begin to emerge.
In April, Bitfinex Securities facilitated a fundraiser for a Hampton by Hilton hotel at El Salvador International Airport. Despite limited success to date, this initiative demonstrates the potential of tokenization.
Other use cases, such as tokenized treasury bonds, also attract attention. The success of the BlackRock USD Institutional Digital Liquidity Fund (BUDIL), which has raised $462.7 million since March, highlights the growing interest in these new forms of investment.
Furthermore, as highlighted by Hakim Korso Tlemsani, founder and CEO of Globespoints out:
Real-world assets (RWA) offer unprecedented growth potential, thanks to blockchain streamlining transactions with unparalleled transparency and security. At Globees, we symbolize vacation rentals to cut out middlemen and costs, putting hosts and travelers at the heart of the process.
Hakim Korso
Reputational challenges and future prospects for decentralized finance
Despite the obvious benefits of DeFi, financial institutions remain cautious due to the “reputation risk» associated with this sector still marked by frauds.
Nevertheless, significant progress has been made. KPMG, for example, uses the Chainalysis infrastructure to identify illicit activities. The implementation of such measures reassures banks and other asset managers.
Kunal Bhasin points out that soon, not being involved in crypto assets like bitcoin (BTC) could pose a career risk. Therefore, the rise of DeFi may well become a strategic imperative to remain competitive.
As decentralized finance continues to transform real estatea question remains: which sector will benefit from tokenization next?
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Mikaïa A.
The blockchain and crypto revolution is underway! And the day when the impacts are felt on the most vulnerable economy in this world, against all hope, I will say that I had something to do with it
DISCLAIMER
The views, thoughts and opinions expressed in this article belong solely to the author and should not be considered investment advice. Do your own research before making any investment decisions.