What do the Queen of England, the Catholic Church and Bill Gates have in common? Owned land, a lot! Earlier this year, the Melinda & Bill Gates Foundation became the largest farmland owner in the United States, with over 240,000 acres (approximately 97,000 hectares). The Catholic Church owns over 71 million hectares of land the size of France, but the largest non-state landowner is Queen Elizabeth II. According to Love Money: “Queen Elizabeth II is by far the largest non-governmental landowner in the world, the head of the British Commonwealth and therefore the legal owner of an estimated 2.7 billion hectares of land owned by the New Statesman. This is equivalent to one-sixth the land area of the Earth. The Crown Estate comprises much of London, large tracts of farmland in the UK countryside and more than half of the British coast. ”
Savills estimates that the global real estate industry is worth more than $ 200 billion, of which about $ 185 billion is in residential real estate and $ 15 billion in commercial real estate. Last year, more recent data from the Associated Press showed that the value of real estate worldwide is approaching $ 270 trillion and is expected to reach $ 330 trillion by 2023. Residential real estate in the UK alone is valued at $ 8.7 trillion. Therefore, it should come as no surprise that many organizations are exploring how technology, including blockchain, can improve the efficiency of continuous buying, selling and managing real estate. Much has been written about real estate tokenization, but there are relatively few examples to date, perhaps because tokenized real estate creates digital security that is subject to the same regulatory restrictions as any debt or public offering capital instrument. This means that issuing digital security in multiple jurisdictions is not an easy process, as there will be different regulatory requirements for registrations to comply with.
Therefore, it was interesting to see that Binance, the world’s largest digital exchange, recently started offering tokenized shares, that is, securities backed by assets but sold as a token. Binance’s proposal gives investors the option to purchase a digital version from Tesla and Coinbase, but does not issue a prospectus (a normal requirement), but instead has issued a one-page document. This prompted the German Federal Financial Supervision Authority (BaFin) to act by warning Binance, stating that a prospectus must be published if the shares that Binance wishes to offer “can be transferred, can be traded on a cryptocurrency exchange and have economic rights, for example for Binance’s protections, the German digital platform CM-Equity (where Binance has included its tokenized versions of Tesla and Coinbase) has already included other stocks and is trading similar tokenized assets issued by FTX and Bitterex, although BaFin appears to be skeptical and is now suggesting that Binance’s tokenized shares violate the rules.
Bitterex itself offers access to the following stocks to investors in different countries where it is usually not possible to trade such stocks. Therefore, it is easy to understand the value of creating tokenized shares if the process is, in fact, legal:
Tesla ETF SPDR S&P 500 Alibaba Beyond Meat Inc Pfizer Apple BioNTech Facebook Google Netflix Amazon Bilibili
On the other hand, the demand for trust fund-backed stablecoins will undoubtedly increase if the demand for tokenized stock trading increases, because how will investors receive the dividends they are entitled to? Really not in Fiat? As mentioned in previous releases of Digital Bytes, expect to see more organizations creating stablecoins in major world currencies. Setting up a digital host in euros, yen, pounds sterling, Swiss francs and US dollars (of which there is already a certain amount) will allow real estate to start paying rental income digitally. The ability to pay dividends on rental income from stocks and property digitally also gives businesses and owners the ability to distribute them more frequently to investors. Most payment platforms like Apple, GooglePay, Mastercard, and Visa accept a variety of cryptocurrencies, so you should have no problem accepting these new digital currencies / stablecoins – another example of how banks can be bypassed. Traditional. because payments can be processed more efficiently.
For real estate tokenization, the infrastructure, which has always been necessary, is gradually being assembled. Services such as digital custody, banking, regulated digital exchanges, and digital methods of collecting and paying rent are now available, and while trading in tokenized shares is permitted, a precedent has also been set for real estate.