Interest In GIFT City’s Real Estate Digital Assets Growing
GIFT City witnesses interest in real estate assets tokenization. Platforms like Pinvest Exchange offer liquidity and transparency for trading tokenized real estate assets. Terazo, a Category III AIF by Collated Ventures, provides India's first tokenized security offering for a commercial real estate project in GIFT SEZ. GIFT City is seeing interest in real estate assets tokenization. In the past three months, two companies have started asset tokenization and two more are in the pipeline. After a real estate developer backed platform started asset tokenization at GIFT City, a fintech company has received a licence from the International Financial Services Centre Authority (IFSCA) for a platform where assets of multiple projects located outside India can be traded. Currently these platforms are working under the regulatory sandbox framework and after proper functioning, their scope will increase.
Asset tokenization is a concept which converts ownership rights of various assets into digital tokens formed using blockchain or distributed ledger technology (DLT). This means that instead of investing large sums of money in an asset — say a real estate project or shares or gold — one can invest a fractional amount using asset tokens, which are tradeable.
IFSCA recently issued the Limited Use Authorization to a Hyderabad-based fintech company— Realdom India Pvt Ltd — to offer asset tokenization in real estate. The company will thus launch its platform, Pinvest Exchange. Tushar Deochakke, director of the company, said, “We are going to offer multiple project assets to investors who will be non-residents and foreign investors. According to the regulatory sandbox framework, we will carry out testing of our product, Pinvest Exchange, where dummy test transactions will be executed. This will be a kind of exchange where assets tokens of projects located outside India will be traded. This will bring liquidity to real estate investment with transparency. As of now, we will work on completed projects.”
He added that while equity, bullion, commodities, diamonds, NGOs and SMEs have established bourses, real estate and infrastructure does not have its own independent marketplace. This can be an exchange for real estate assets.
The first platform that enables asset tokenization and trading has been operationalized by Terazo, a Category III alternative investment fund (AIF) launched by real estate major Collated Ventures. It has launched India’s first tokenized security offering regulated by the IFSCA, under the regulatory sandbox framework with a corpus of $7 million. The first digital asset available for tokenization will be a commercial real estate project in GIFT SEZ, which will be jointly executed by the Savvy Group and Collated Ventures.
According to sources, two more companies are starting real estate digital asset tokenization at GIFT City.