# Why tokenisation of real estate will survive crypto winter
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2020-01-16
Category: FINANCE
Category URL: https://financedigest.com/category/finance
Meta Title: Real Estate Tokenisation: Breaking the Mould in 2019
Meta Description: Learn how Matthieu Bouchaud, Digital Asset Lead at ConsenSys, delves into the progress and growth of real estate tokenisation in 2019, amidst blockchain
URL: https://financedigest.com/why-tokenisation-of-real-estate-will-survive-crypto-winterhtml

![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/finance-5-1736838956184-compressed.jpg)

By **Matthieu Bouchaud**, Digital Asset Lead at [ConsenSys](https://consensys.net/)

_Projects led to the reform of the ecosystem through the modification of the legislative universe, Matthieu Bouchaud, Digital Asset Lead at_ [_ConsenSys_](https://consensys.net/) _explains why the tokenisation of real estate is far from having slowed down in 2019._

![Matthieu Bouchaud](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/matthieu-bouchaud-450x450-1736838956176-compressed.jpg)

Matthieu Bouchaud

Blockchain has been at the forefront of the technology world since 2017, when it _sparked a wave of_ _enthusiasm._ A year later many became disenchanted with the technology as projects were stopped and there was a lack of funding and market prospects. MIT even predicted that in 2019 “blockchain would become boring.”

_The projects, however, have not disappeared,_ _and some_ have in fact led to the _creation of new forms of_ _savings, particularly in_ _the case of real estate funds_, which, little by little, are adopting tokenisation. [Currently in full swing](https://www.financedigest.com/euro-zone-current-account-swings-back-to-a-surplus-in-june.html "Euro zone current account swings back to a surplus in June"), tokenisation is one of the blockchain-based technologies that has stood firm and already attracted many players, including some finance heavyweights.

**Already validated technology**

For example, on April 18 2019 Societe Generale issued 100 [million Euros](https://www.financedigest.com/sp-global-fined-1-1-million-euros-for-premature-credit-rating-publications.html "S&P Global fined 1.1 million euros for premature credit rating publications") on the blockchain, in the form of “OFH Tokens” rated triple A (AAA) by rating agencies Moody’s and Fitch. In September it was Santander’s turn to issue $20 [million worth](https://www.financedigest.com/supercapacitor-market-size-to-worth-around-usd-5979-67-million-by-2026-tmr.html "Supercapacitor Market Size to Worth around USD 5,979.67 Million by 2026 – TMR") of bonds on Ethereum. _Tokenisation_ _,_ _therefore ,cannot_ _be considered_ to still be in its infancy. In the UK, Her Majesty’s Land Registry R&D programme conducted a trial demonstration of [real estate](https://www.financedigest.com/the-professionals-at-real-estate-funding-solutions-helping-you-find-success-with-commercial-real-estate-loans.html "The Professionals At Real Estate Funding Solutions Helping You Find Success With Commercial Real Estate Loans") tokenisation on the Ethereum public blockchain – issuing a title token associated with a virtual property with tokenised equity.

While tokenisation allows [fund managers to generate investor](https://www.financedigest.com/credit-suisse-to-repay-further-750-million-to-greensill-linked-fund-investors.html "Credit Suisse to repay further 0 million to Greensill-linked fund investors") registry maintenance more simply, its use also makes it possible to transform how to distribute and exchange the shares of a real estate fund. The idea is to enable Asset [Managers to continue to manage their assets](https://www.financedigest.com/asset-management-firms-are-using-ai-to-deliver-higher-returns-for-investors.html "Asset management firms are using AI to deliver higher returns for investors") as their liabilities evolve, through an automated secondary market that complies with the regulations in place.

The [growth of real estate tokenisation is also observed](https://www.financedigest.com/automated-weather-observing-system-market-segments-opportunity-growth-and-forecast-by-end-use-industry-2021-2031.html "Automated Weather Observing System Market Segments, Opportunity, Growth and Forecast by End-use Industry 2021-2031") through the number of start-ups that have decided to use it. In 2019, about half of the start-ups using tokenisation have used it for real estate.

**A legislative framework for the blockchain**

The implementation of legislative frameworks and publication of guidance in multiple countries, like the UK, France, Luxembourg or Germany (to name a few) is encouraging the use of [blockchain technology](https://www.financedigest.com/how-blockchain-technology-can-help-the-fashion-industry-make-verifiable-green-claims.html "How Blockchain Technology Can Help the Fashion Industry Make Verifiable Green Claims"). However, even with tokenisation becoming accessible to a [wide range](https://www.financedigest.com/exclusive-wide-ranging-solarwinds-probe-sparks-fear-in-corporate-america.html "Exclusive: Wide-ranging SolarWinds probe sparks fear in Corporate America") of users, _it is not uncommon to come up against those that are still fearful of these_ _projects. We must not forget that these new blockchain [regulations and clarifications have not even been in force for a year](https://www.financedigest.com/german-regulator-hands-ey-2-year-audit-ban-over-wirecard-scandal-handelsblatt.html "German regulator hands EY 2-year audit ban over Wirecard scandal – Handelsblatt")!_

Furthermore, the [regulatory framework](https://www.financedigest.com/how-to-navigate-multiple-data-privacy-regulatory-frameworks.html "How to navigate multiple data privacy regulatory frameworks") rarely comes before the creation of an ecosystem, but rather its introduction acknowledges a fully functioning ecosystem that needs to be regulated. [Regulation also provides security](https://www.financedigest.com/uk-finance-regulators-should-pay-heed-to-energy-security-policy-says-sunak.html "UK finance regulators should pay heed to energy security policy, says Sunak") that will encourage other actors. However, we should always keep in mind that the blockchain is simply a new tool that enables more transparency and more fluidity to real estate funds, it is not [changing the legal](https://www.financedigest.com/hungary-pledges-legal-changes-to-secure-eu-recovery-funding-govt.html "Hungary pledges legal changes to secure EU recovery funding – govt") characteristics of the underlying asset.

**Technology neither behind nor late**

Finally, tokenisation for real estate funds is not behind or late; less than a year after the adoption of a regulatory framework, large-scale projects are in production and 2020 will likely [see the creation of the first distribution platforms for the real estate industry](https://www.financedigest.com/airline-body-iata-sees-industry-recovery-now-in-2023.html "Airline body IATA sees industry recovery now in 2023").

Tokenisation [projects exist due to the fact](https://www.financedigest.com/doppler-ultrasound-market-value-projected-to-expand-during-2021-2031-fact-mr-report.html "Doppler Ultrasound Market Value Projected to Expand during 2021-2031: Fact.MR Report") that the benefits are quantifiable. Tokenisation has proven itself with various real estate Asset Managers that have adopted it, resulting in reduced costs of creating, distributing and [trading](https://www.financedigest.com/trade-finance-the-small-brush-to-paint-the-big-picture.html "Trade Finance: The Small Brush to Paint the Big Picture") financial products, and increased transparency in transactions and asset management.


---
This blog is powered by Superblog. Visit https://superblog.ai to know more.
---