Government Regulation Could Disrupt the Adoption of Tokenized Property

Over the years, technological advancements have been taking huge leaps, mushrooming new trends in property ownership. Key among the innovations in blockchain technology is the core of cryptocurrencies. Today, the power of blockchain tech is leveraged in digitizing tangible assets. Gone are the days when the blockchain was a preserve for the tech-savvy. Property owners have joined in the frenzy by using digital tokens to fractionalize the value of their assets. Being a relatively new endeavor, it’s a gray area for governments worldwide in terms of regulation as most laws are technology agnostic. Since the tokenization of property is increasing in popularity, numerous governments have swooped in to try and enact laws for the sector. Some of the laws are proving detrimental to the tokenized property sector. This write-up will explain how government regulation can disrupt the adoption of tokenized property, but first, let’s dive into what tokenization entails. Understanding Tokenization and How It Works Traditionally, investors would buy and wholly own properties; tokenization is a means of curing that. It has a fractionalization feature, allowing multiple people to invest in tiny chunks of the same property. For a property to earn the moniker tokenized, it undergoes three stages. Property owners settle on the kind of asset they wish to tokenize. Afterward, they can form a subsidiary or SPV, where shareholders can have rights to d...