Tokenized Real Estate on the Blockchain: An Interview with Sanjay Raghavan
In a recent episode of Cointelegraph’s “Hashing It Out” podcast, Elisha Owusu Akyaw interviews Sanjay Raghavan, the Vice President of Web3 Initiatives at Roofstock onChain, about the tokenization of real-world assets on the blockchain. Raghavan explores how digital real estate investing interacts with the nonfungible token (NFT) market and the decentralized finance landscape.
One major use case of blockchain technology that has gained traction is the tokenization of real-world assets. Raghavan explains that companies selling real estate on the blockchain must first purchase the property and create a limited liability company (LLC). An NFT is then created, which represents ownership of the LLC. When users buy the NFT, they effectively purchase the property itself. This process enables real estate to be transacted digitally, bringing the benefits of blockchain technology to the traditional real estate market.
Regarding regulations for tokenizing real-world assets, Raghavan acknowledges the complexity of the current landscape. In the United States, each state has its own rules on asset sales, which means navigating separate compliance requirements across 50 jurisdictions. This regulatory fragmentation poses challenges for companies operating in the tokenized real estate space.
Raghavan also highlights the potential benefits of real estate tokenization for crypto-native investors. He suggests that these investors may see real estate NFTs as a diversification tool, providing exposure to an asset class that is less correlated to the price of Bitcoin (BTC) and other cryptocurrencies. By adding real estate NFTs to their portfolios, crypto investors can potentially reduce risk and increase stability.
The conversation with Raghavan also delves into the topic of fractionalization in the NFT space. Fractional NFTs, which enable partial ownership of an asset, may require running a securities program that could deter companies operating in the United States. However, Raghavan suggests that non-U.S. citizens may have the opportunity to access fractional NFTs in the future if companies from outside the jurisdiction acquire properties and sell NFTs in other markets.
Tokenized real estate presents a promising avenue for Web3 adoption and the mainstream integration of blockchain technology. It offers new possibilities for investors, both in terms of diversification and fractional ownership. However, navigating the regulatory landscape and addressing potential risks will be crucial for the successful development of the sector.
For more insights and in-depth discussions on blockchain and cryptocurrency topics, listen to the full episode of “Hashing It Out” on Spotify, Apple Podcasts, Google Podcasts, or TuneIn. Check out Cointelegraph’s complete catalog of informative podcasts on the Cointelegraph Podcasts page.
Please note that this article provides general information and should not be considered legal or investment advice. The views and opinions expressed here are solely those of the author and do not necessarily reflect the views and opinions of Cointelegraph.
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