- The Dubai Land Department forecasts that around 7% of all real estate transactions in Dubai will involve tokenized properties by 2033
- The market value of those projects will be around $16 billion
- Two months ago, DAMAC Group, a Dubai developer, joined forces with blockchain platform MANTRA to tokenize a minimum of 1$ billion in Middle Eastern assets
Dubai has launched a pilot program to tokenize its real estate assets, marking a significant move to integrate blockchain technology into the property sector.
The Dubai Land Department (DLD), in collaboration with the Virtual Assets Regulatory Authority (VARA) and the Dubai Future Foundation (DFF), has kicked off the project to convert property title deeds into digital tokens recorded on the blockchain.
The DLD anticipates that by 2033, tokenized real estate could constitute approximately 7% of Dubai’s total property transactions, translating to a market value of around 60 billion dirhams, which is approximately $16 billion.
How Does This Make Buying Property Easier in Dubai?
Using blockchain tech could easily improve the processes of buying, selling, and investing in real estate in Dubai. Tokenization lets you own just a fraction of a property, which means it could lower the bar for new investors and make the market more active.
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It also offers a more defined ownership structure than crowdfunding, where investor money is combined for property acquisition. That said, there might be some obstacles with real estate. According to a McKinsey report on tokenization from last year, real estate may see slower tokenization growth due to operational challenges.
Has Dubai Been Pushing Blockchain Before?
This move to tokenize real estate is actually the second big step Dubai has taken recently to become a leader in adopting blockchain solutions. Just two months ago, in January, Dubai-based developer DAMAC Group partnered with blockchain platform MANTRA to tokenize assets worth at least $1 billion in the Middle East.
DAMAC is a major Dubai developer with holdings in real estate and data centers. Furthermore, it has been investing in data centers globally, so this is bound to have an impact.
Related: Dubai Government-Owned Bank Emirates NBD Activates Digital Currency Trading Services
As for MANTRA, they had also teamed up with MAG Property Development last year to tokenize $500 million in real estate assets, starting with a residential project right in Dubai, a main center for Gulf tourism and business.
All things considered, it seems obvious that the UAE and Dubai want to establish themselves as a worldwide digital asset center, which includes the crypto industry as well.
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