Blockchain to the Rescue—Tokenization of Residential Real Estate in the Emerging Token Economy

Blockchain technology allowing mass tokenization of assets represents the fundamental element of the ongoing industrial revolution. It helps asset owners to draft unique and tailored product offerings with access to broad groups of investors, exit opportunities and limited risk of fraud. Nevertheless, potential hazards to the process and the very concept exist. The near perspective of a private stablecoin threatening the financial system puts pressure on governments, regulators and the banking system to adopt the revolution rather than oppose it. Tokenization of residential real estate assets opens vast opportunities for inclusion of traditional financial institutions in the process via oracle services, as the quality of data exposed to the asymmetry of information and other factors particular to this market segment is crucial. The author believes that retail banks should further leverage their role in the economy, given their business experience, local expertise or trust, and drafts a concept of the Oracle Bank operating at the crossroads of the physical and digital worlds. This organization should emerge from the unstoppable process of the financial paradigm shift. The discussion on the institutional adoption of residential property tokenization should not be limited to the security of transactions but reflect other aspects of the inevitable redefinition of the banking sector’s role in the emerging token economy, with residential real estate at the focus point of future socio-economic development plans.