Moscow Exchange Plans to Democratize Real Estate Investment with Blockchain-Based Digital Financial Assets

In a significant move to democratize real estate investment, the Moscow Exchange has unveiled plans to introduce blockchain-based digital financial assets (DFA) by the year 2024. Sergei Kharinov, the director of digital assets at the Moscow Exchange, revealed this ambitious initiative on Monday, emphasizing its potential to create a fresh avenue for funding real estate developers while offering investors a more accessible entry point into this lucrative market. These digital assets are poised to provide numerous benefits, including a minimum return, a hedge against inflation, and profits linked to the rising value of square meters in housing complexes.

The operation and management of these digital assets will be entrusted to established entities with the expertise and infrastructure to facilitate their smooth operation. Among the selected institutions are the National Settlement Depository (NSD), Sberbank of Russia, Alfa Bank, St. Petersburg Exchange, and Blockchain Hub. All these entities are part of a group of ten financial institutions authorized by the Bank of Russia to issue blockchain-based digital financial assets.

The primary goal of this initiative is to enable programmable transactions, thus reducing entry barriers for both retail and qualified investors. This effort aligns with a broader global trend of utilizing blockchain technology to enhance transparency and accessibility in financial markets.

Notably, this step mirrors other innovative investment opportunities provided by entities like Samolet Plus and G Group. Blockchain-based assets are set to revolutionize real estate investment by creating a direct fundraising channel for property developers. This novel approach allows developers to secure funding more efficiently and provides investors with a simplified investment process.

However, the Moscow Exchange’s initiative is not without regulatory oversight. The Central Bank of Russia (CBR) is advocating for short-term regulations to bolster security, safeguard investor interests, and enhance information disclosure. This decision comes in spite of an existing regulatory framework for smart contracts in the country. The CBR insists on conducting independent audits before deploying blockchain-based digital assets, aiming to instill confidence and security in this emerging investment landscape.

The introduction of blockchain-based digital financial assets by the Moscow Exchange represents a significant step in promoting inclusivity and accessibility in real estate investment. By leveraging the capabilities of blockchain technology and fostering collaboration with leading financial institutions, this initiative aims to provide both seasoned investors and newcomers with a more efficient and transparent means of participating in the real estate market. It is poised to reshape the real estate investment landscape in Russia and may set a precedent for similar initiatives worldwide.

Digital Assets Desk