In a notable effort to democratize real estate investment, the Moscow Exchange has unveiled plans to launch blockchain-based digital financial assets (DFA) by 2024. The announcement was made by Sergei Kharinov, the director of digital assets at the Moscow Exchange, who highlighted the potential of this initiative to provide a new avenue for financing real estate development while making it more accessible for investors. These digital assets are expected to offer several advantages, including assured returns, protection against inflation, and profits tied to the appreciation of housing complex square meters.
The responsibility for the operation and management of these digital assets will be entrusted to established entities with the required expertise and infrastructure to ensure their smooth functioning. Among the selected institutions are the National Settlement Depository (NSD), Sberbank of Russia, Alfa Bank, St. Petersburg Exchange, and Blockchain Hub. These organizations are part of a group of ten financial institutions authorized by the Bank of Russia to issue blockchain-based digital financial assets.
Democratizing Real Estate Investment through Digital Assets
The primary objective of this initiative is to enable programmable transactions, which will lower entry barriers for both retail and qualified investors. This effort aligns with a global trend of employing blockchain technology to enhance transparency and accessibility in financial markets.
It’s worth noting that this move reflects other innovative investment opportunities offered by entities such as Samolet Plus and G Group. Blockchain-based assets are poised to revolutionize real estate investment by establishing a direct fundraising channel for property developers. This innovative approach streamlines the funding process for developers and simplifies the investment process for potential investors.
Regulatory Oversight Ensures Investor Security
Nevertheless, the Moscow Exchange’s initiative does not escape regulatory oversight. The Central Bank of Russia (CBR) advocates for short-term regulations to bolster security, safeguard investor interests, and improve information disclosure. This decision has been made despite an existing regulatory framework for smart contracts in the country. The CBR insists on conducting independent audits before deploying blockchain-based digital assets, with the goal of instilling confidence and security in this emerging investment landscape.
The introduction of blockchain-based digital financial assets by the Moscow Exchange marks a significant step toward promoting inclusivity and accessibility in real estate investment. Through the utilization of blockchain technology and cooperation with leading financial institutions, this initiative aims to provide both experienced investors and newcomers with a more efficient and transparent means of participating in the real estate market. This move has the potential to reshape the real estate investment landscape in Russia and may serve as a model for similar endeavors worldwide.
