Securities-based token issuance (STO) has become a hot topic in the virtual asset market. Many financial institutions are studying how to implement asset tokenization to release asset value. Julian Kwan, chief executive of InvestaCrowd, a blockchain investment platform, said in an interview with Coinsnetwork that the real estate tokenization project will become a future trend, and the potential has “no limit”.
Traditionally, the cost of real estate is high, and the entry threshold is not easily accessible by ordinary people. In addition, Hong Kong is affected by property market restrictions such as additional stamp duty. The lock-up period has become longer and it is naturally harder to get out of the market quickly. Cheung Kong sold a multi-story and car parking spaces of the Center Tower for $5.15 billion USD in 2017, making it the largest property transaction in Hong Kong. For a long time, property has always been a non-current asset. Currently, the emergence of STO can theoretically divide the property into infinite aliquots by issuing tokens, the potential value can be released, and retail investors can also enter the market.
Talking about the development of this market, Kwan described the potential of the market with “no ceiling”. He stressed that there are countless real estate projects that need to be tokenized. Even though only a few percentages of the property market can be successfully developed, its value is very large. “We believe that future securities will operate in electronic form, so STO is also an effective way…Everyday we receive a token request for a token value of approximately $700 million.”
Securities-type tokens are used as a channel for the next generation of assets. Kwan pointed out that in addition to the paperlessness, that is conducive to daily administration, its security and transparency are also a major advantage. However, if real estate is to be tokenized, and its necessary to develop a program to match the reality, investors will need time to adapt to new technologies. Currently, the market still does not understand ICOs and STOs, so there are certain difficulties in implementation and it takes time to educate the public. He expects that the degree of acceptance will become more and more popular in a few years.
InvestaCrowd focuses on the development of real estate tokenization projects to create asset liquidity. The company will first strictly review and estimate the value of the property, and then announce the degree of tokenization of the property; from the early stage of STO to the completion of financing, they provide a one-stop service. Kwan explained that the current business is divided into two layers, including STO and ICTX; ICTX is a securities token exchange, allowing investors to trade tokens in the second market for real-time settlement; business is concentrated in Singapore, Hong Kong, Australia, the United States, the United Kingdom, and Europe.
Hong Kong has rapidly developed cryptocurrency in recent years. The Securities and Futures Commission has also issued new guidelines and sandboxed plans to regulate related virtual asset funds and trading platforms. Kwan believes that the real estate market is the best in the world. Most of the properties are held by private individuals. The local government also has clear securities laws and regulations, which are very suitable for token-based projects.
During the “Hong Kong Blockchain Summit 2018” on December 12, Julian Kwan, together with the remaining securities-based token experts, will share more about the prospects and applications of this emerging asset class at the seminar. Don’t miss this summit.