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The tokenization of real estate in Thailand
30/10/2021
Thailand’s Security and Exchange Commission (SEC) recently awarded the Blockchain company Fraction a license to set up an initial coin offering portal. An ICO Portal is a system designed to facilitate the offering of newly issued digital tokens. The ICO portal’s duties include performing due diligence on the integrity of digital tokens to be offered and qualifications of their issuer. ICO Portals ensure all required information relating to the digital asset is complete and accurate.
Fraction’s licence approval is significant for a number of reasons, most significant of these being the fact that Fraction intends to trade tokens representing fractional ownership of real estate assets. This is a first for Thailand.
What is fractional ownership of real estate?
Fractional ownership of real estate assets is essentially part ownership of a physical building through the purchase of digital tokens. These digital fractions can be purchased during an ‘Initial Fraction Offering’ (IFO). Fractional ownership of assets has become an emerging fintech trend, but has yet to fully take hold, however, this is expected to change over the coming years.
When an investor purchases one of blockchain-based tokens offered by Fraction, these tokens represent ownership interests, and/or entitle the token holders to income, dividends or revenue generated from real estate assets e.g. any rent made or profit from sales.
What does this mean for the real estate market in Thailand?
Investing in real estate is one of the most popular ways for people to invest their money, however, in reality it is only really accessible to the wealthy.
Fraction has stated that it will set a low price for their tokens, allowing ordinary people the opportunity to invest in real estate. IFO’s such as those Fraction are planning reflect the current global shift towards the ‘Sharing Economy’. This shift can be seen through the rise in popularity of NFT’s.
Blockchain is booming in Thailand, with more and more exchanges popping up and being granted licences. The interest in Crypto has seen an interest in people using it as a way to purchase property in Thailand. Real estate in Thailand can be purchased using Cryptocurrency, however, it is an often difficult process. Licences being granted to companies such as Fraction are laying the foundations for the development and growth of this area.
Conclusion
The continuing growth and development of the blockchain infrastructure in Thailand and the willingness of the SEC to issue licences for ICO/IFOs is a positive sign for business and investors alike. Companies such as Fraction are laying the foundations for other companies to come to Thailand and take advantage of the opportunities on offer.
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Please note that this article is for information purposes only and does not constitute legal advice.
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