Fundament, a Berlin-based blockchain startup, has received the green light from the German Federal Financial Supervisory Authority (BaFIN) to issue Germany’s first tokenized real-estate backed bond for the amount of €250 million. The security token is based on the Ethereum blockchain and will build a globally tradeable digital asset backed by commercial real estate while abiding by existing regulatory frameworks.
By virtue of its regulatory approval, the German company’s security token offering (STO) will utilize blockchain technology to make it widely offered to any investor globally with no minimum investment restrictions. Someone in Canada, for example, can purchase $100 worth of Ethereum (ETH) and use that to invest directly in Fundament’s token – thereby owning a portion of German commercial property. Fundament’s real estate token is a way of offering liquidity to traditionally illiquid commercial real estate, access a global investment pool, enabling fractional share ownership, and make the asset available for trading 24/7.
According to Crowdfund Insider, the digital real estate platform is said to “open up the German real estate market to global investors.” The merger of blockchain and real estate has been gaining steam as of late. Recently, Templum Markets also issued security tokens that represented shares in a Colorado ski resort.
Florian Glatz, Co-Founder of Fundament Group, said in a statement to Coindesk that “the reason we went through this long tedious process with regulators was to get rid of any restrictions. Normally these projects are limited either by the minimum investment amount, which would be north of €100,000 or limited heavily in the amount of investors you could have. So it’s the first really like mass-market tokenized real estate for the world.” Glatz went on to describe the legal claims of the real estate bond. “Holding a token enshrines a legal claim of the holder against the issuer of the bond to pay them an annual dividend of around 4-8 percent, and obviously once the run time of the fund is over and there is an exit, then the token holders get the complete value that within this fund,” says Glatz.