German Financial Regulator OKs $280M Blockchain Bond For Real Estate
Germany's financial regulator, BaFin, has approved a blockchain-based real estate bond which will be worth $280 million. This bond, offered by the Fundament Group, will be based on the Ethereum blockchain. According to Yahoo! Finance the firm also announced it will also be backed by a portfolio of real estate properties across Germany.
The Fundament Group revealed through a tweet that it had received permission from BaFin. They claim to have the "first-ever" regulated real estate-backed security token. Fundament also said that this "real estate token" secures a right or share certificate, as all blockchain-backed documents have been revealed to be.
BaFin, through news from Token Post, said that they received approval for a prospectus. They shared that it was the first time such a prospectus regarding blockchain-based real estate bonds had been created, but not the first time in respect to blockchain technology. They urged the public to stay tuned as for their upcoming public sale.
The company issued a press release where they revealed that the bond, based on the public Ethereum using the ERC-20 standard, is backed with a portfolio of different real estate properties spread across Germany. The Fundament Real Estate token securitizes a right or a share certificate through the use of a digital token, made available globally with no minimum investments.
Investors are invited to buy into the property using bitcoin or US dollars and euros. Fiat payments are not being ruled out but tokens are preferred. These will be delivered through a hardware device. Clients can also liquidate their investments through any designated secondary markets.
The co-founder of the group, Florian Glatz, said that the company went through this long process to avoid any standing restrictions from regulators. Glatz cleared to the news media that these projects can be limited-either by the minimum investment amount, or by the number of investors that can put assets into it. It's really the first mass-market tokenized real estate made available to the public, he added.
The token can be traded globally and it allowed investors to liquidate investments "any time they want" through the secondary markets designated by the investors. They can make deposits through any denomination and even Ethereum is encouraged. The founder has already said that they are already planning to tokenize other "highly attractive assets."
With property market introductions like this, there's no surprise why pundits are saying that the bitcoin market is currently expanding.