Why does SIX invest in a Spanish Real Estate Tokenization and Trading Platform via its Spanish subsidiary, BME @Bolsas y Mercados Españoles, the Spanish Stock Exchange?
Why should we care?
Is OpenBrick just another startup in a niche market, tokenizing securities for real estate projects in Spain (i.e. “Blockchain Real Estate Tokenization”)? Or is there more to it?
SIX states: “… [it] will position itself as a major player in the EU’s digital agenda … of financial markets. This investment is part of SIX’s commitment to play a leading role in the future of financial markets by entering new assets and exploring … innovative technologies such as DLT, … in the real estate sector, which is traditionally highly valued by investors in Spain.”
SIX: Strengthening Its Position in Digital Asset Markets
> This investment complements the Swiss SDX, the world’s first fully regulated digital securities exchange and central securities depository (CSD), also under SIX Group.
> It pushes SIX’s EU branch, BME, into the digital asset space, with its subsidiary Iberclear applying for an EU DLT TSS license under the EU DLT Pilot Regime by 2025.
> Iberclear will act as a fully EU-regulated platform for digital asset secondary market operations, including trading, settlement, and asset depository via DLT infrastructure.
> OpenBrick’s tokenized property assets/securities will become tradeable on a secondary market, benefiting from increased liquidity.
Real Estate: Challenges for Retail Investors
> Real estate is illiquid: It’s the largest and oldest asset class, but buying or selling properties quickly, without steep price discounts, is nearly impossible. ????
> Low accessibility for retail investors: High housing prices create significant entry barriers, especially for young families. Even a standard 20-25% down payment required by banks locks many out of the property market. ????
A Positive Outlook for Retail Real Estate Investors
> Liquid Market: DLT trading platforms allow real estate tokens to be traded with a single click. Investors can benefit from returns such as rental income and appreciation of the underlying property’s value.
> Market Access and Fractionalization: Fractionalization during the tokenization process enables retail investors to own smaller shares of real estate via security tokens. Retail investors can now access Tokenized Real Estate Investments, starting from as little as CHF/EUR 100.
> Development of Secondary Market Trading Platforms: SIX is systematically building digital asset trading platforms. In Switzerland, SDX is operational, while Iberclear will soon launch a similar service in the EU under DLT TSS licensing. With SIX’s expertise, these Digital Asset Trading Platforms provide intermediaries and investors access to a secure, regulated ecosystem.
> Transforming Real Estate’s Illiquidity: For retail investors, tokenization promises access to real estate as an asset class previously reserved for institutional players. With time and liquidity, the real estate market could become more inclusive.
*Note: Tokenizing real estate is complex and costly, requiring regulatory compliance (FIDLEG and MiFID) and a minimum scale (e.g., properties above CHF/EUR 10 million). However, the progress is promising, and the potential for retail investors is significant.
What do you think? Could tokenized real estate democratize access to this asset class for retail investors? Let me know your thoughts below!
#RealEstate #DLT #SIX #DigitalAsset #Liquidity #Innovation
I believe that tokenization of real estate could / will be a real game changer, but I wouldn’t go as far as saying it will democratize the access to this asset class. It will definitely make the asset class more inclusive. The dream for many families is to become a home owner (to give the family a roof over their heads); the tokenization of real estate will not make that happen but will give a large population the opportunity to diversify its investments. I’m definitely following the development of this topic in your blog with great interest.
Thank you, Hans for your thoughts and following this blog ????
Yes, agree, tokenization of RE RWA does not provide direct property access. Though, it opens the access TO the masses of the benefit from the financial returns generated via rental incomes and appreciation. And that access does not really exist today, as RE fund or REITs mostly limited to professional, wealthy investor groups only. This aspect relates to the democratization effect in the given context.