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When bricks meet bytes: does tokenisation fill gaps in traditional real estate markets?

Author

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  • Giulio Cornelli

Abstract

Using novel US data from multiple platforms over 2019–25, I show that real estate tokenisation fills gaps in traditional markets. The supply of tokenised real estate is driven by pricing, demand, liquidity and supply in the physical property market. These factors affect the supply of traditional real estate properties and Real Estate Investment Trust (REIT) portfolios differently. Areas with limited access to credit see more rapid growth in tokenised properties, suggesting tokenisation may bridge gaps in access to real estate. Finally, to test whether tokenisation can address liquidity gaps, I analyse trading activity around natural disasters as an exogenous liquidity shock. Trading in tokenised properties rises by 35% cumulatively over the two days following a disaster. This suggests that tokenisation can preserve liquidity when it typically dries up, but only if platforms provide buyback features, which comes with higher insolvency risk.

Suggested Citation

  • Giulio Cornelli, 2025. "When bricks meet bytes: does tokenisation fill gaps in traditional real estate markets?," BIS Working Papers 1311, Bank for International Settlements.
    • Handle: RePEc:bis:biswps:1311
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    More about this item

    Keywords

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    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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