ABSTRACT
Blockchain and cryptocurrencies have ushered in a digital gold rush. But all that glitters is not gold. The latest fad is the use of non-fungible tokens (NFTs) to purchase and finance real estate. Typically, crypto real estate transactions begin with the transfer of title for a residential property into a dedicated business entity, such as a limited liability company. Thereafter, an NFT is ‘minted’ and used to represent the ownership interest in that entity. The real property is then marketed online specifying that, to acquire it, one simply purchases the relevant NFT via a blockchain transfer. Crucially, buyers are expected to use the NFT as collateral to fund their purchase, rather than obtaining a traditional mortgage. Proponents of this novel structure insist that it yields cheap, fast, and secure real estate transfers, disrupting a sector infamous for its high costs, delays, and labyrinthine bureaucracy …
Freyermuth, R Wilson and Odinet, Christopher K and Tosato, Andrea, Crypto in Real Estate Finance (November 4, 2022), University of Missouri School of Law Legal Studies Research Paper No 2022-13; University of Iowa Legal Studies Research Paper No 2023-21; 75 Alabama Law Review 93 (2023).
Leave a Reply