Blockchain, the technology that underpins Bitcoin and allows value to be transferred from person to person by generating a cryptographically secure digital ledger of every transaction, will power a new e-mortgage platform.
Dubai Land Department (DLD), a government agency, has signed a license agreement with United Arab Emirates-based Mashreq Bank to launch the blockchain-based mortgage platform. The new system intends to overhaul the burdensome task of processing mortgage loans. By streamlining paperwork and storing vital information on the blockchain, the platform is expected to expedite complex procedures, driving down costs and increasing efficiency.
According to a report by local news outlet The National,
“The development and launch of the new e-mortgage system come as part of our ongoing efforts to enhance automation applications and systems in our transactions to reduce paper transactions and the number of visits,” said DLD director general Sultan Butti bin Mejren.”
Following a property sale, Mashreq mortgage holders will be connected to DLD’s new electronic mortgage registration system. Related data will flow through the blockchain where payment fees can be logged and document modifications can be tracked.
Says Majid Saqer Al Marri, chief executive of registration and real estate services at DLD,
“Applying the e-mortgage system requires synergy with leading UAE banks … to spread its benefits to the largest number of investors.”
Dubai is striving to become “the world’s smartest city” by next year through the implementation of blockchain-based systems to wipe out sluggish, outdated legacy platforms from the 1970s, 80s and 90s.
In addition to real estate transactions, the government plans to integrate smart contracts on the blockchain to handle bill payments, license renewals and visa applications, among other bureaucratic processes, to reduce carbon emissions, streamline paperwork and eliminate high fees.