DLA Piper and Bloqhouse, a Dutch fintech startup, have today announced their newly formed partnership. The partnership will combine DLA Piper's experience in privacy, regulatory and financial law with Bloqhouse's extensive knowledge of building blockchain-based solutions. Together they are working on legally compliant tokenization of real assets on a global scale. Tokenization is the process of making assets digitally and peer-to-peer tradable on a blockchain.
Trading assets using peer-to-peer technology such as blockchain is becoming increasingly popular in the financial industry. Financial institutions, brokers and exchanges worldwide are investigating how to use such technologies to not only trade digital assets, like Bitcoin, but also real assets. Examples of such assets include real estate, gold, grain or artwork. A breakthrough in this area will create a completely new paradigm of value exchange.
As a pilot transaction, the teams will focus on tokenizing a real estate investment fund, a legal entity owning one or more real estate objects. Fund equity certificates will be tokenized and deployed to the Ethereum blockchain. The token holders are entitled to the economic benefits realized by the entity, consisting of the rental income minus fund management costs. The pilot is scheduled for late 2017.
Monique Laenen, Real Estate partner at DLA Piper, and Tim Rutgers, Co-Founder of Bloqhouse said: "We are very excited about our partnership. We believe tokenization will have a big impact on the real estate sector and through this partnership we aim for Bloqhouse to become among the first in the European market to solve the many legal challenges blockchain entrepreneurs are confronted with."