During the recent Paris Blockchain Week, Securitize Chief Operating Officer Michael Sonnenshein sparked controversy by dismissing real estate as a sub-optimal asset class for tokenization. This perspective has raised eyebrows in the crypto community, with some expressing disagreement. Darren Carvalho, Co-Founder and Co-CEO of MetaWealth, has stepped forward to challenge Sonnenshein's viewpoint, pointing out the significant potential that real estate tokenization holds.

Real estate stands as the largest asset class globally, with a projected value of $654.39 trillion this year, according to Statista. Carvalho emphasizes that overlooking the transformative potential of bringing real estate onto the blockchain is a missed opportunity. While Sonnenshein argues that traditional assets already have efficient systems in place, Carvalho counters by highlighting the systemic flaws in the current real estate market that tokenization can address.

One of the key inefficiencies in traditional real estate transactions is the lengthy paperwork process and high purchasing fees, especially in regions like the UK where additional costs can inflate the total bill by 10%. Settlement periods can drag on for months, and cross-border transactions add layers of complexity. Tokenization technology, with features like smart contracts, can automate compliance, streamline verification, and reduce fraud through immutable record-keeping.

Carvalho also challenges the notion that the primary demand in the onchain economy is for more liquid assets. He argues that for many everyday investors, the crucial need is meaningful access to an asset class that has historically generated substantial wealth. Traditional real estate investment vehicles often require significant capital, accredited investor status, and long lockup periods, excluding a large segment of the population from participating in lucrative real estate opportunities.

Tokenization fundamentally changes this landscape by fractionalizing ownership, allowing investors to enter the market with smaller amounts, receive proportional income distributions, and trade their positions on specialized secondary markets. This democratized access to real estate investments has garnered significant interest, even if secondary market liquidity may not yet match that of more liquid markets.

Carvalho further addresses Sonnenshein's concerns about the translation of ownership representation in real estate to tokenization. He explains that blockchain technology enables transparent and secure fractional investments, breaking down barriers to entry and allowing investors to build personalized portfolios across various property types.

Despite skepticism from some industry leaders, Carvalho remains optimistic about the future of real estate tokenization. Institutional players are increasingly entering the space, launching tokenized investment vehicles and demonstrating a growing appetite

Source: https://cointelegraph.com/news/crypto-leaders-wrong-about-property?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound