Germany’s financial regulator BaFIN has approved a $280 million Ethereum-based, real estate-backed, tokenized bond from the crypto startup Fundament.
By tokenizing real estate on the Ethereum blockchain, the company plans to give investors around the world an easy way to buy Real Estate Tokens, which represent shares of German commercial property. Individuals in various countries and different continents will be able to participate in buying the real estate-backed tokens without going through a bank. The globally traded asset will allow someone in Hawaii, for example, to invest in German real estate along with stakeholders across the globe.
Retail investors will have no investment minimums, reports Coindesk. According to a BaFin representative,
“We can confirm that we granted approval for a Fundament Group prospectus. It has indeed been the first time we have approved a prospectus regarding blockchain-based real estate bonds, but not the first time in respect to blockchain technology as such.”
Florian Glatz, co-founder of Fundament Group, president of the German Blockchain Association and founding member of INATBA, the European blockchain association, says the Ethereum-based token will be backed by five construction projects in Germany and can be purchased with Bitcoin, Ethereum, US dollars or euros. The value of the Fundament Real Estate Token is designed to rise with the value of the real estate portfolio.
According to Fundament,
“Due to its stable growth, Germany’s commercial real estate market remains a highly desirable investment opportunity for global investors.
Although new construction activity has increased in recent years, there still exists a chronic shortage of commercial space in German metropolitan areas.
The result of the above factors is a sustained upward trend in purchase and rental prices for commercial real estate and an attractive opportunity for investors looking to profit from the German real estate market.”