Crypto

Blockchain is a radical remedy for property theft

Unlike cryptocurrencies, which are still banned by the authorities, blockchain technology seems to be making its way into the Moroccan business world.

A few weeks ago, Banque Populaire (BCP) issued for the first time, backed by the Moroccan Capital Market Authority (AMMC) and Maroclear, blockchain-based bonds as part of a Dh100 million fundraiser. The first in Morocco that seems to announce the arrival of others.

But first of all, not being all fascinated by digital technologies, it is legitimate to ask the following question: what is blockchain and what is it for?

We will try to answer them as clearly and concisely as possible. Those who want to get more detailed information, especially on the technical side, can turn to hundreds of explanatory videos on the net.

Blockchain is, first of all, a decentralized, decentralized and encrypted database.

In addition to being public and accessible to everyone, it keeps a trace or some kind of fingerprint of all transactions made. However, the people behind these transactions remain anonymous.

This fully computerized system eliminates the need for a trusted third party (bank, notary, etc.) to complete a transaction (purchase, sale, transfer of value, etc.).

So you can send someone the amount of 1000 dirhams without going through the bank and the associated costs, or you can buy or sell property without going to a notary. Being human, the notary is corrupt, but the blockchain is not.

This database consists of blocks containing several hundred transactions recorded in indelible memory, which are added to other blocks, thus forming a chain of blocks or chain of blocks.

The computing power needed for blockchain is provided to the network by individuals and companies through powerful computers. They are called “miners”.

As far as the queen of cryptocurrencies, Bitcoin is simply the original monetary protocol that uses the blockchain system.

But apart from the private sector, which is often at the forefront of new technologies, can the state effectively use this technology in the service of citizens?

The answer is yes. One of the application sectors that needs it the most is land. Because the mafia in the literal sense, that is, the robbery of real estate, is deployed with tentacles in different layers (administration, justice, notaries, local electors, etc.).

We all remember the letter sent by His Majesty the King in 2016 to the then Minister of Justice, Mustafa Ramid, calling on the authorities to take the necessary measures to put an end to this scourge of property theft.

Since then, formally much has been done: an interdepartmental commission, discussions on the reform of legal texts, and so on.

But on the ground, the citizens who are victims of these abuses, including many MREs who are easy prey, continue to suffer in silence. Files of complaints are piling up, and impunity still seems to have a bright future ahead of it.

Moreover, it seems useful to me to recall that Article 2 of Law 39/8 is the best ally of this mafia. This limits the admissibility of a complaint in the event of theft of your property to four years. Thus, if you, by misfortune, think that your property, acquired by the sweat of your face, is eternal, then you are seriously mistaken.

The right to property, considered sacred in a market economy, becomes a matter of constant concern for citizens who are forced to systematically check every four years whether their house belongs, paying 100 dirhams in passing each time to find out. Many victims, even realizing during these four years that their property was stolen, still experience difficulties in defending and restoring their rights.

But what is blockchain in all of this?

Well, that might fix the problem at the root. Because these crimes cannot exist without the denial of a trusted third party. Because robbing property necessarily requires notaries, civil servants, judges, clerks, and corrupt local elected officials, who can then do anything to block or sabotage a possible investigation.

The process of using blockchain technology for real assets, in this case real estate, is called “tokenization”.

This allows the transfer of ownership of a real commodity on the blockchain and ensures the incorruptibility of all the various transactions associated with it.

For example, a property can be tokenized in an indivisible way, i.e. the token expresses ownership of the entire property, as it can be divided into multiple tokens, resulting in collective ownership. The latter opportunity could be extremely interesting for the real estate sector, as it increases liquidity in this market, in particular for the development of projects with rental yields.

For example, if an apartment is worth 1 million DH and its property is tokenized for 100 shares, that is, 10,000 DH tokens, I can become a shareholder of this property for only 20,000 DH by purchasing two tokens. The real estate agency that will manage the property will then pay the respective shares to each token holder at the end of each month after deducting the cost of managing and maintaining the property.

Simply put, tokenization makes it possible to turn any real product into a company with several shareholders, saving on notarial acts and the endless and expensive procedures that currently prevail.

But the most important thing here is that thanks to blockchain technology, your property is constantly protected. Because all network members have proof that your property belongs to you.

From this perspective, this technology, which already exists in its infancy in the United States, takes the form of an incorruptible, decentralized, and disintermediated land registry or cadastre. What disabled the mafia mentioned above.

But then there is the issue of taxes. Because, as we mentioned earlier, the blockchain actually keeps track of all ongoing transactions, but at the same time keeps the network participants anonymous. Consequently, the state will not be able to know who sold to whom and who owes how much to the treasury.

The solution lies in the need for new legislation that could establish the fact that the tokenization of divisible or indivisible real estate must be carried out digitally, through digital platforms provided by the state, in order to be able to collect all information about the acquirers. tokens, as well as the value and nature of the transaction. But, being guaranteed by the blockchain system, no official will be able to spoil this ledger.

In conclusion, while you wait to bet on the goodness of human nature to fight corruption, technology is ready to fill your moral bankruptcy.

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