Author: Brayden Lindrea, CoinTelegraph; Translated by: Wuzhu, Golden Finance
Kunal Bhasin, co-head of digital assets at KPMG Canada, said institutional investors will buy high-value commercial real estate stocks tokenized on blockchain when more opportunities arise.
Bhasin noted that tokenization could transform who owns large commercial buildings — historically limited to deep-pocketed real estate and pension fund managers.
The technology could potentially allow institutional investors, such as family offices, to own a portion of Toronto’s major shopping malls, the Eaton Centre and other large buildings.
“Tokenization of commercial real estate can actually enable this,” said Bhasin, who predicts it will become one of the largest institutional use cases for crypto.
Cointelegraph's Sam Bourgi (left) speaks with KPMG's Kunal Bhasin (right) at the Collision Conference in Toronto. Source: Cointelegraph
But Bhasin noted that many “institutional DeFi” participants prefer to trade in a more permissioned environment.
“Institutions recognize the efficiencies that decentralized financial technologies bring, but they want to understand the participants they are interacting with.”
Bhasin said know-your-customer checks are also an important part of the process.
Tokenized real estate is slowly being adopted.
Bitfinex Securities facilitated a tokenized asset raise in April for investment in a 4,500-square-foot Hampton by Hilton hotel at El Salvador International Airport — but has raised just $342,000 to date, less than 6% of its $6.25 million goal.
Tokenized treasuries and money market funds is another bullish use case that Bhasin expects to expand further in the near future.
He noted the relative success of the BlackRock USD Institutional Digital Liquidity Fund (BUDIL), which has been valued at $462.7 million since its launch in March, according to data compiled by 21Shares.
Reputational risk holds institutions back, but this is improving
Bhasin noted that asset managers and banks remain wary of becoming more active in the cryptocurrency space due to the proliferation of frauds and scams.
In this sense, “reputational risk” still exists, but progress has been made recently.
Bhasin said KPMG used the infrastructure of blockchain analytics firm Chainalysis to identify potential illicit activity that could be linked to its client base.
“Fraud exists in every industry,” he said, but banks are more likely to work with industry players that have implemented the necessary infrastructure and best practices to identify any illegal activity.
“Soon, not being involved in crypto and digital assets will become an occupational risk,” Bhasin said.
“If you don’t offer it today, your competitors will — and they’re gaining an advantage over you.”