As tokenization continues to be adopted across industries, Japan-based financial company Sumitomo Mitsui Finance and Leasing Company, Limited (SMFL), a subsidiary of Sumitomo Mitsui Financial Group, Inc. (NASDAQ: SMFNF), has shown great interest in experimenting with real estate offerings.
The company stated that it will continue with the pilot initiative through US-based tokenization platform Vertalo to revolutionize the local real estate sector. The SMFL’s latest partnership will integrate Vertalo’s token platform with its existing asset tracking platform, AssetForce.
While AssetForce focuses primarily on physical assets, SMFL says its offering can be expanded to digital assets, using blockchain technology to track assets. Early details from the proof of concept (PoC) indicate that the integration will enable SMFL to provide real estate companies with a wealth of data on tokenized assets, including non-fungible tokens (NFTs).
In addition to tokenized real estate transactions, SMFL has also set its sights on applying the digital asset tracking solution to furniture in rental properties. The SMFL said the solution can also be used in Digital Product Passports (DPP), taking advantage of the immutability and transparency of blockchain.
SMFL notes that its innovative solution will address several pain points in the real estate market, including seamless data transfer between transaction participants. The Japan-based company notes that the offering, if rolled out commercially, will face issues related to the
security and accuracy of data.
“By linking asset data writing and storage technology using a chain, information is obtained between multiple parties involved in the ST composition,” a company statement said. “We have developed a system that can centrally manage information exchange and have carried out a proof of concept.”
Tokenization of real estate
Real estate companies are turning to tokenization in a bid to stay ahead, with Japanese companies rolling out offerings and touting the benefits of opening up the sector to a broader group of investors and promoting trust.
Others point to ‘fractionalization’ as a tool to improve the industry’s liquidity figures, with India’s GIFT City and Israel throwing their hats into the ring.
“To start with, asset tokenization will be launched for real estate, and in the future, other asset classes such as works of art, ships and aircraft, among others, will be included,”
said a government official. “This will allow more foreign investors to finance development and other projects here.”