Blockchain: A black swan for the Real Estate industry in Latin America?
by PropTech Latam Summit
The impact of the Blockchain is worldwide. But what is happening with this in Latin America?
This was the theme of the conference "Blockchain: A black swan for the Real Estate industry?" celebrated at the last PropTech Latam Summit in Santiago de Chile. Just raised the impact that Blockchain is generating in the industry, and as an unexpected factor can radically change and forever the way of doing business in the world . The panel was composed for experts from different countries who brought their visions and experiences closer: Lorena Farias, CEO of TRUSBLOCK SOLUTION LTD (London, UK), Nathan Wosnack, Founder and CEO of Ubitquity LLC (USA), Gabriel Scheare, Co-founder of Fort Galt (USA-Chile) and Felipe Acevedo, Head of Corporate Transactions of JLL (Chile). The objective was to give attendees a general view of what is happening with this technology at a global, regional and local level. This technology is located in what is called Proptech 3.0, and its application in the real estate sector is recent.
In the region there are already several cases of use of this technology. A very emblematic case is the use of Blockchain by the Chilean Energy Commission, which last March began to use this technology through the Open Energy platform to certify the quality and certainty of the open data of the national energy sector.
Ubitquity presented two specific cases in Latin America, of the few examples that exist in the region: the first pilot case of Blockchain use was in southern Brazil (State of Rio Grande do Sul), presented by Blockchain @ UBC, the group of collaborative research at Columbia University. Wosnack expanded the audience with more cases, counting its expansion to areas such as Chile and Paraguay.
In the Chilean case, it is through Fort Galt, a real estate project in Valdivia. One of the founders of Fort Galt, Gabriel Scheare, also a panelist of the presentation, Canadian investor of cryptocurrencies, in 2014 he founded this real estate project with three of his friends from the United States. They started with nothing more than a shared vision of what their ideal community could be and, since then, they have brought together investors and capital while refining their designs. "We use cryptocurrencies to facilitate the investment process for the members and we are registering all the information through the Blockchain, being one of the first cases in the region. Today, the construction of the project is under way near Valdivia, in southern Chile, and it is already a reality, "he commented with great enthusiasm.
The transformation of real estate?
The impact of Blockchain in particular in the Real Estate industry is not clear yet. For Acevedo, "One of Blockchain's biggest impacts in the commercial real estate sector would be a faster contract management process that streamlines transactions. With smart contracts, each part of a lease or sale would be automated, and, for example, payments would be received instantly, even outside business hours "exemplified the representative of JLL, and continued" intelligent contracts would also accelerate processes of due diligence prior to the lease and / or purchase, generating that the process of background check is faster. The parties involved in a contract can access it with a personal digital key, which could reduce the likelihood of fraud. "
Additionally, the Blockchain technology is being used in the registry of property titles. Technology has the potential to drastically reduce the traditionally long process of registration and transfer of titles, with the added benefit of transparency. More and more governments are seeking to apply this technology as a way to store and easily access historical title records.
Why is it said that the impact of this for the real estate industry is so strong? The change is profound, and not only in form, but in concepts. "Blockchain technology has the potential to decentralize our economy, eliminating intermediaries, which we create as a society to give confidence to two parties that generate a transaction," says Acevedo.
According to the expert opinion of Trustblock solution "in the real estate area, the blockchain would allow us, among other things, to know with certainty who owns a certain property, what are the legal conditions in which it is located, what are the permits with what counts, what are the materials that have been used in its construction and its costs, how labor has worked, and much more. All this in a short period of time and at a much lower cost than the current one. "
Blockchain for everything?
Beyond being "the word of the moment" that everyone talks about, and that seems to have changed the world, we must ask ourselves if the Blochchain is applicable to all industries and what impact it really generates in each one of them. "There are certainly visible benefits in the real estate industry that have to do with digitizing the registry of assets, supply chains, identity records of people and real estate, but there are industries that will not need blockchain technology at all" opined Wosnack.
Looking to the very near future, according to Wosnack "in the future I see more tokenization for real estate transactions in countries in regions such as Latin America, and in third world countries such as Africa (where we are exploring pilots and API clients) that have fewer regulatory restrictions than the United States"
"Today, when the competition is global, international companies that have offices in Singapore, Shanghai, Qatar, Dubai are already taking that first step. Those same companies have offices in Latin America. Do not stay behind, dare. This paradigm shift, like it or not, will come. Be prepared "promoted Lorena Farias.
"Like any new technology, Blockchain has not been exempt from criticism. However, as its use becomes widespread, these problems will be resolved. Currently there are more than 1000 startups, with more than US $ 6.0 billion in financing for this technology, so it is difficult to think that its implementation and growth will stop. While we all know that the real estate industry is highly conservative, which is moving much slower than other sectors, I believe that this technology will surely transform the real estate sector in a short time, "concluded Felipe Acevedo.