Moscow Exchange mulls blockchain-driven real estate investment

The Moscow Exchange has unveiled plans to issue blockchain-based digital financial assets (DFA) by 2024, aiming to democratise real estate investment. Sergei Kharinov, the director of digital assets at the exchange, announced this initiative, which seeks to provide a new funding avenue for real estate developers and make real estate investments more accessible to a wider range of investors.

Key points regarding this initiative include:

1. Investment Opportunities: The goal is to offer investors a way to invest in real estate with a lower entry threshold. This will enable individuals to gain exposure to real estate markets while also providing a hedge against inflation and potential profits linked to the appreciation in the value of housing complexes.
2. Asset Management: The digital assets will be managed by authorised entities, including the National Settlement Depository (NSD), Sberbank of Russia, Alfa Bank, St. Petersburg Exchange, and Blockchain Hub. These institutions have received the necessary approvals from the Bank of Russia to issue such assets.
3. Reduced Entry Barriers: The initiative seeks to lower entry barriers for both retail and qualified investors, making real estate investment more accessible.
4. Programmable Transactions: Blockchain technology will enable programmable transactions, streamlining the investment process and increasing transparency.
5. Central Bank Regulations: The Central Bank of Russia (CBR) is pushing for short-term regulations to enhance security, investor protection, and information disclosure for these digital assets. These measures are aimed at ensuring the safety and trustworthiness of this new form of investment.
6. Independent Audits: The CBR is emphasising the need for independent audits before the deployment of these digital assets. This step is crucial for building trust and security within the investment ecosystem.

The Moscow Exchange’s initiative aligns with global trends in leveraging blockchain technology to create new investment opportunities and make traditionally illiquid assets, like real estate, more accessible to a broader range of investors.