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The company partners with Hong Kong’s CBDC pilot to digitise real estate assets
July 11, 2023 | Staff Reporter | Hong Kong | Proptech
The idea of tokenizing real estate assets has long been a dream for many blockchain projects. And now, thanks to a Hong Kong Central Bank Digital Currency (CBDC) pilot, Ripple Labs is one step closer to making that dream a reality. The company has partnered with Hong Kong Monetary Authority for CBDC pilot and help the HKMA develop a tokenization solution that records e-HKD real estate transactions on a “secure and private ledger”. Furthermore, the solution is tailored for central banks.
Discussing the company’s work, Ripple’s Managing Director Brooks Entwistle said that CBDCs make the strongest case for the utility of blockchain technology. In a statement, Antony Welfare, who advises the firm on its CBDC strategy, said that tokenization is the future of real estate. “There is no doubt that digital currencies are going to be a part of the landscape going forward,” he added. Furthermore, Entwistle revealed that Ripple is discussing its technology with more than 20 central banks.
Like its peers around the world, the HKMA began operating a CBDC in response to the rapid digitisation of payments. The authority is currently exploring various use cases for the digital Hong Kong dollar.
Real estate tokenization, as the name suggests, involves creating digital tokens that represent physical land and properties. Typically, blockchain technology securely issues tokens and tracks ownership.
Tokenization presents many opportunities for the real estate sector. Long payment times, complicated paper trails and high cost of entry can disrupt the traditional real estate sector. But tokenization promises to digitise the process. In addition to expediting transactions, fractional real estate tokens enhance investment opportunities and can open up significant new funding avenues.
Current use cases for the technology include Parcl, a blockchain-based trading platform. The technology allows users to invest in indexes representing various real estate markets, such as major US cities. A more recent example is the Direct Property Africa Token (DPAT). Trading on the NFT marketplace, DPAT provides global investors with access to prime land, property and infrastructure projects across Africa. In conclusion, in the opposite direction, the new platform opens up alternative funding streams for developers.
