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Real estate tokenization as an alternative investment solution

Author

Listed:
  • Berentsen, Aleksander
  • Markheim, Marina

Abstract

Tokenization refers to the process of creating a virtual representation of a real asset by creating fungible tokens which enables fractional ownership. If such tokens are created on a public and permissionless blockchain such as the Ethereum blockchain, they are immediately tradeable worldwide 24/7. Established token standards and immediate settlement are further benefits of this novel technology. Tokenization has the potential to remedy the illiquidity problems of real estate investments. However, outdated regulatory frameworks and regulatory uncertainties currently still limit a broad adoption of the technology.

Suggested Citation

  • Berentsen, Aleksander & Markheim, Marina, 2022. "Real estate tokenization as an alternative investment solution," MPRA Paper 115307, University Library of Munich, Germany, revised 2021.
    • Handle: RePEc:pra:mprapa:115307
    as

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    File URL: https://mpra.ub.uni-muenchen.de/115307/1/MPRA_paper_115307.pdf
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    References listed on IDEAS

    as
    1. Marina Markheim & Aleksander Berentsen, 2021. "Real Estate trifft auf Blockchain: Chancen und Herausforderungen der Tokenisierung von illiquiden Vermögenswerten [Real estate meets blockchain: Opportunities and challenges of tokenization of illi," Zeitschrift für Immobilienökonomie (German Journal of Real Estate Research), Springer;Gesellschaft für Immobilienwirtschaftliche Forschung e. V., vol. 7(1), pages 59-80, April.
    2. Ping Cheng & Zhenguo Lin & Yingchun Liu, 2013. "Liquidity Risk of Private Assets: Evidence from Real Estate Markets," The Financial Review, Eastern Finance Association, vol. 48(4), pages 671-696, November.
    3. Ang, Andrew, 2014. "Asset Management: A Systematic Approach to Factor Investing," OUP Catalogue, Oxford University Press, number 9780199959327.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    blockchain technology; smart contracts; fractional ownership; tokenization of real estate; security token; token regulation;
    All these keywords.

    JEL classification:

    • G19 - Financial Economics - - General Financial Markets - - - Other
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis
    • R39 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other

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