Real estate tokenization will become the main method of financing, owning and trading real estate in the near future, potentially reaching a market of $4 trillion by 2035. This is reported by Coindesk with reference to the report of the Deloitte Financial Services Center, writes UNN.
Details
Real estate tokenization, once a niche experiment, may soon become a key element in financing, owning and trading real estate, the report's authors predict.
The company forecasts that the market will grow at a compound annual rate of 27%, compared to the current volume of less than $300 billion.
This is a hot sector of the money market at the intersection of cryptocurrencies and traditional finance. It consists of creating digital versions of assets, such as bonds, funds and real estate, which represent ownership rights on blockchain rails. This process offers operational efficiency, cheaper and faster settlements, and wider access for investors.
For the real estate sector, the attractiveness of tokenization lies in its ability to automate and simplify complex financial transactions, the report explains, such as launching a real estate fund in a blockchain with encoded rules for processing the transfer of ownership and capital flows.
An example of this is Kin Capital's $100 million Chintai real estate fund tokenization platform with trust-based lending, Deloitte notes.
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The report outlines a three-way evolution of tokenized property: private real estate funds, ownership of securitized loans, and projects on undeveloped or undeveloped land.
Tokenized debt securities are expected to dominate among them, reaching a value of US$2.39 trillion by 2035, according to the report's forecast. Private funds may contribute about $1 trillion, while land development assets may reach about $500 billion.
Let us remind you
Cryptocurrencies have fallen in price on the global market. Major tokens fell by 5% on Thursday, April 24, as traders booked profits on a steady rise since the start of the week. At the same time, the meme coin Dogecoin (DOGE) is the leader in losses among the largest assets.