1.3 REAL ESTATE TOKENIZATION: A REVOLUTIONARY INNOVATION

In the global financial sector, tokenization is experiencing rapid growth, thereby enabling investments through digital tokens backed by physical securities or assets. Blockchain, a distributed ledger technology that maintains identical data copies across an authorized stakeholder network, is fundamental to the tokenization of real estate assets.

Tokenization utilizes blockchain’s immutable security features to enable digital fractional ownership with secure transaction records and swift settlement processes. Traditionally, real estate has suffered from low liquidity due to high capital requirements and lengthy, costly transaction processes.

Real Estate Investment Trusts (REITs), a subset of real estate asset classes have historically outperformed other major asset classes over the long term, providing a more liquid means of accessing the real estate market. Through real estate tokenization, property or its holding company is divided into smaller units or tokens, each represented as a digital token on a blockchain. This innovation allows investors to buy and sell fractional ownership of real estate assets more easily and profitably than before.