Gu Yanxi | Real Estate Token Market Infrastructure (4): Digital Stable Coin
At present, the application of blockchain technology in the US real estate market is mainly used to improve the efficiency of existing processes. While one goal of this effort is to enhance the liquidity of real estate assets, progress has been slow due to imperfect infrastructure and faulty business models. Among the missing infrastructure services, the lack of application of digital stablecoins is an important lack in this regard.
One of the main purposes of applying blockchain technology to the real estate market is to provide liquidity for real estate assets. Dividing the ownership of a real estate into standardized small units for transaction circulation is the most basic measure to realize asset circulation. However, due to the restrictions of the current US law, the real estate that flows in this way can only be open to qualified investors in the US and investors outside the US, and there are also many restrictions on publicizing it to the public. Due to the inherent characteristics of this asset class, real estate can only attract a part of qualified investors in the United States. Accredited investors in the United States account for only about 2% of the total population of the United States. Some of them are less in number. However, the real estate itself has a large number of types and is scattered, so it is difficult to achieve better flow based on the certificate generated by a single real estate. However, in terms of targeting overseas investors in the United States, under the premise of compliance, there is a lot of room for operation. In the process of selling to overseas users, various costs must be low, and at the same time, the convenience of transactions must be guaranteed. In such a process, digital stable currency is an indispensable trading medium. For overseas users in the United States, digital stablecoins can greatly improve transaction efficiency and reduce costs. This is conducive to their investment in US real estate. This is also conducive to expanding the scale of overseas users, so it is very helpful for financing. However, among the basic services of the current US real estate token market, digital stablecoins have not been widely used. If this problem is resolved, the real estate token market in the United States will be further activated.
Even in the U.S. market, if digital stablecoins are widely used, it will be very helpful for U.S. investors to purchase real estate tokens. The primary source of real estate financing in the United States is banks. Since the bank itself is subject to strict compliance restrictions, it will have many restrictions in the course of its business development. For example, a method of raising funds for real estate, with the participation of banks, it is impossible to raise funds based on digital currency. If digital stable coins are widely used, investors can have a large amount of digital stable coins for direct investment, then real estate developers can directly raise enough funds from users with digital stable coins. Fundraising like this is much less constrained. In the secondary trading market of real estate tokens, the application of digital stable coins will also greatly improve transaction efficiency, which will also increase the liquidity of real estate tokens. So even in the U.S. market, the widespread application of digital stablecoins will greatly improve the liquidity of real estate assets.
From the perspective of the value of blockchain technology itself, one of its important functions is to facilitate the flow of digital assets around the world. At present, the application in any industry should first aim at internationalization, rather than being limited to one market. However, in the current U.S. real estate token market, the mainstream business philosophy is still based on the U.S. domestic market. One consequence of this guiding ideology is that it does not pay enough attention to the application of stablecoins, because in the US market, the use of US dollars is commonplace. Similarly, the corresponding business model will naturally encounter many difficulties, and it cannot give full play to the maximum value of blockchain technology.
The real estate token market in the United States has developed to this day, and it has begun to realize the importance of internationalization to this business. This understanding has made greater progress than in 2018. Service providers in this market are beginning to establish service facilities outside the United States. The sales of real estate tokens in the United States have also begun to pay more attention to overseas users. With the progress of these businesses in internationalization, the application of digital stable currency will definitely receive more and more attention. It is believed that it will be increasingly used in the US real estate token market.
I have always believed that after the launch of the Libra digital stablecoin, its first service target must not be the 1.7 billion users worldwide who do not receive financial services or have insufficient financial services as claimed in its white paper, but will definitely make the application more popular in the world. The field of cross-border transactions and payments. The nature of the members who have recently joined the Libra Association is also proving my point. Recent members joining the Libra Association include companies in the fields of cross-border e-commerce, cross-border payments and encrypted digital currencies. Their common feature is that their business is in the field of cross-border transactions and payments. For the real estate industry, the globalization of the flow of real estate tokens is also imperative (see my other related article), and the digital stable currency will be very helpful to the global flow of real estate assets, so I wouldn't be surprised if a company uses the Libra stablecoin to provide real estate tokenization services.
