Blockchain & Digital Assets @ RSM 🏦 Disrupting accounting 📒 Innovating financial services 🦸
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Tokenize Real Estate? Not Without Asking These 3 Questions First Tokenizing real-world assets like real estate sounds like a no-brainer. Fractional ownership, liquidity, faster settlement—what’s not to like? But implementing it inside a traditional business model? That’s another story. Here’s where most projects go sideways: they skip the hard questions early and end up with tokenized assets no one can legally trade, or worse, can’t legally hold. If you’re leading a digital asset initiative, especially in real estate or other fixed assets, ask yourself (and your legal team) these three questions before writing a single line of smart contract code: 1. Who’s allowed to hold the token—and how do you enforce that on-chain? This isn’t just about KYC. Every asset class has built-in restrictions: accredited investor rules, jurisdictional caps, holding limits. Your token contract needs logic that enforces these rules without breaking compliance. And if you’re using a public blockchain, you’ll need whitelisting, transfer permissions, or even identity-linked wallets baked into your design. Ignore this and you build a liability, not a product. 2. How do you map legal ownership to token ownership? You can’t just say “own the token, own the asset” and assume it’ll hold up under audit or litigation. You need a legal wrapper—typically a special purpose vehicle (SPV) or trust—where the SPV owns the asset and the token represents equity or a profit-share stake in that entity. Your legal model must be tied directly to the token mechanics and codified in both operating agreements and smart contracts. 3. What happens when things go wrong—foreclosures, investor exits, or token freezes? Compliance doesn’t end at issuance. It’s about what happens when the unexpected hits. Blockchain may be immutable, but business risk isn’t. You need off-chain procedures mapped to on-chain authorities: who can pause trading, burn tokens, or initiate clawbacks? If the answer is “we’ll figure it out when we get there,” you’re already exposed. There’s a right way to bring traditional assets on-chain—and it starts with legal, not tech. Done correctly, tokenization reduces friction, builds transparency, and opens global liquidity. But only if you anchor your strategy in compliance from day one. How is your team navigating the legal-to-blockchain handoff on tokenized assets? Let’s share lessons—the real ones, not the polished slide decks.