General Concept of Real Estate Tokenization on Blockchain
Published in the European Property Law Journal | De Gruyter EPLJ 2020; 9(1-2): 1–45 https://doi.org/10.1515/eplj-2020-0003
45 Pages Posted: 4 Jun 2020 Last revised: 7 Oct 2020
Date Written: April 6, 2020
This paper presents a concept of real estate tokenization, which includes legal, technological, and organizational aspects. The research introduces a theory of a Title Token - a digital record of ownership on the blockchain. It is discussed the principle of technological neutrality, where the traditional land registry is not necessarily abandoned in favor of blockchains, but instead, people gain the right to choose. Nowadays, public administrations use central-server databases, giving no alternatives for citizens. Recognition of the right of citizens to choose which technology to apply for managing their property rights creates a basis for free competition and the development of new technologies for better public services. Decentralized distributed ledgers are the key to decentralization. They enable more secure automation of legal procedures. On the contrary, centralization is a source of many issues in governance: abuse of power, corruption, inefficient governance, and high costs, slowness and complexity of bureaucratic procedures. With automation and reduction of intermediaries, the role of the government does not decrease but significantly changes, i.e. land cadaster bodies should not be monopolistic providers on the market. The paper introduces a theoretical basis for developing a new type of property registries.
Keywords: blockchain, distributed ledger technologies, real estate, property rights, land registry, cadastre, tokens, title tokens
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