Sun, golf, swimming pools, storage rooms and garage tracks, sea views and "a privileged environment". A priori, little technological innovation can be found in another real estate development on the Spanish coast. Metrovacesa sells 205 homes in Pulpí (Almería) of the development Birdie & Falcon, and the showcase is the same as always. But many things are happening in the back room: it's a transaction tokenized in blockchain, one of the first attempts to change many of the rules of the game of the sector using the chain of blocks.
The tokenization consists basically in the transaction in blockchain of tokens, that is, of digital units issued privately, that represent a value or a right and that are protected by cryptographic keys. According to believers in the token-economy, there will come a point where the tokens they will allow us to divide, with all the effects, what until now is indivisible (for example, the ownership of a house, something very useful for divorces and conflicting inheritances); and market what is now incomercializable, like the time in which we do not use our car or the processing capacity of our computer equipment.
The regulation causes that, at least a priori, the real estate sector is not the most appropriate for the tokenization. But there are already real cases of transactions. Last fall, an important operation took place in the United States: the conversion into tokens of 18.9% of a hotel in Aspen, Colorado, for 18 million dollars. And currently, from $ 21,000, can be purchased tokens of a luxury student residence next to the University of South Carolina.
In the case of Birdie & Falcon, what Metrovacesa is tokenizing There are 73 homes in a development that reaches 205 properties, but not strictly for sale, but with the aim of accelerating processes and gain efficiency in view of operations with international funds. "This type of promotions are especially interesting for Arab investors, but normally until you get to them you have to go through three or four intermediaries," explains Carmen Chicharro, director of innovation at Metrovacesa, which has in this project the collaboration of the startup of blockchain BrickEX and the professional services firm Grant Thornton.
To improve processes, Metrovacesa "digitizes the pre-sale" in the public network of blockchain of Ethereum, with two types of tokens. The former are used primarily to formalize interest; If the process continues to advance, a second type of tokens, whose execution depends on smart contracts (precisely Ethereum's strong point). They work like accounts escrow, also called trust, in which buyer and seller obtain mutual guarantees through the intermediation of a neutral third party. In this case, the properties are blocked for the investor while all data is verified and compliance with all regulations for the Prevention of Money Laundering.
The digital process, already in operation, ends up in the notary's office, because the regulation does not allow to go further. In the tradition of Roman law, unlike what happens in Anglo-Saxon countries, notaries are difficult to replace, and are not limited to attesting the authenticity of a signature.
So, as Jeroen de Leijer, CEO of BrickEX, says, unable to tokenize the property document, "you work in a parallel world, in which you have to differentiate between legal property and economic ownership." "It speeds up compliance, reflecting in the chain of blocks the world that is outside the chain of blocks. But neither blockchain nor does any technology exempt from complying with regulations, "explains Luis Pastor, consulting and innovation partner in Information Technology at Grant Thornton. "This project is a long-term bet," Chicharro concedes.
"We want to create an international real estate market, in which you can trade with properties with the same ease with which you operate on the stock market. Now we work with too many silos, and that causes some investments to remain small. " Jeroen de Leijer, CEO of the Dutch startup BrickEX, believes that the possibility of tokenize real estate assets is a business opportunity for platforms such as your company, created in 2016. "We are a technology company, which only provides the platform", he explains, something like an 'Idealist' of blockchain, in which the properties are tokenized, but transactions are closed in conventional currencies. "Now it would be very risky to work with tokens, and the large cryptocurrencies are not stable, "he explains.
"The use of tokenization provides many advantages: the first and most important is not having to comply with the PCI / DSS regulations, as we do not store or process sensitive information from customers' cards or accounts," he says. Guillermo Llibre, CEO of Housell.
That is the weak point of that moment tokenization of the real estate sector, which in Spain is already closely followed by notaries and the College of Registrars, which is part of Alastria, the main business consortium to promote the use of the block chain. But at least, all the real estate businesses supported with blockchain have a great advantage a priori: the tokens they do not represent, as usually happens, a promise expressed in computer code but something as tangible as a beach chalet or a hotel room.
It may not be enough to buy flats using the block chain (we do not do it online either), but it is enough to improve the efficiency of the real estate business.