As a crypto investor with a background in finance and experience working with institutional investors, I find Kunal Bhasin’s perspective on tokenization of commercial real estate to be both intriguing and promising. The potential for wider accessibility to commercial real estate through blockchain-tokenized shares is an exciting development that could disrupt traditional investment strategies.
Kunal Bhasin, who is the digital asset co-lead at KPMG Canada, shared his perspective on how tokenization will transform the real estate market for large corporations, enabling more people with diverse financial backgrounds, beyond deep-pocketed individuals and pension funds, to invest in commercial properties.
Institutional investors and family offices now have the opportunity to invest in Toronto’s iconic skyline through blockchain-tokenized shares. This method of investing in commercial real estate is becoming increasingly popular and is predicted by expert Bhasin to be the largest use case for the crypto industry. However, Bhasin noted that more traditional institutional players may prefer a more controlled and regulated environment for their transactions. Speaking with CoinTelegraph, he stated:
“Decentralized finance technology is appreciated for its efficiency by institutions, yet they seek transparency in identifying the individuals or entities engaging in transactions.”
As an analyst, I would emphasize the significance of conducting thorough client due diligence procedures, following Bhasin’s assertion. The market for tokenized real estate is progressing steadily. Recently, Bitfinex Securities successfully executed a tokenized fundraising event for a 4,500-square-foot Hampton by Hilton hotel located near El Salvador’s international airport in April. However, the campaign has only raised $342,000 to date, which is significantly less than the intended target of $6.25 million.
What’s Holding Institutions Back?
As a crypto investor, I can understand why some top asset managers and banks might be hesitant to increase their involvement in the crypto market given the past incidents of scams and frauds. The potential “reputational risk” is always looming, and it’s not an easy decision to make with so much uncertainty involved.
I came across Bhasin’s statement where he mentioned that KPMG employs the technology infrastructure of Chainalysis, a well-known blockchain analytics firm, to identify and flag potential illicit activities within their clientele.
As a researcher studying financial crimes in various industries, I’ve observed that while fraudulent activities exist in every sector, banks generally opt to collaborate with businesses that invest in robust anti-fraud systems and infrastructure. By doing so, they increase their chances of detecting and preventing any illicit activities, thereby maintaining the integrity of their operations and protecting their clients’ assets.
In the near future, neglecting crypto and digital assets in your profession could lead to career disadvantage. Your rivals are already embracing this trend, thereby gaining an edge over you.
Real-world assets are increasingly being converted into digital tokens as the Web-3 industry grows at a rapid pace. Consequently, it’s expected that we’ll see a significant increase in the number of these assets represented on blockchains within the next ten years.
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2024-06-19 13:42