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Yael Tamar – Solidblock
Interview by fibree.org
This interview is part of a series of conversations with leaders in blockchain for real estate, so our community can learn how blockchain is impacting real estate directly from experts worldwide.
„A global solution to foster blockchain in real estate would be a platform that will include many different licenses within different jurisdictions all over the world to raise funds within those jurisdictions.“
— Yael Tamar
Yael Tamar is the CMO and Partner at Solidblock, which provides a new fundraising vehicle, offering a compliant global platform for the issuance and trade of digital securities backed by real estate & other assets. Yael is a blockchain strategist, speaker, advisor, and mentor.
Prior to Solidblock, Yael founded and led a blockchain advisory firm TopOfBlockchain, where she focused on marketing strategy, market education, and building new business and token models within regulatory and market constraints.
Yael has over a decade of experience as a marketing executive within the fintech, finance, telecom and energy industries, as well as a long track record as an entrepreneur. She has founded the Women in Block global network, advancing women influencers in the blockchain industry. Yael is also a regional co-chair at FIBREE, the Foundation for International Blockchain and Real Estate Expertise, the leading international network for exchanging knowledge between the real estate industry.
Q: Yael, tell us a little bit about your background.
I’d been a financial analyst and private equity and investment consultant for over a decade before I converted into the blockchain space, I’ve also been an entrepreneur on and off for about a decade, building FinTech applications that help people access investments, loans, and so on. Other than that, I’ve been an amateur real estate investor also for about a decade working with actual single family residential homes. The reason why I fell in love with blockchain was because I understood the power of disintermediated transactions and what it can do for many industries. I specifically wanted to apply it to real estate because of my personal desire to get better deals, better opportunities, and to grow wealth through real estate and I felt blockchain would help me solve that problem. And that what was helpful to me would also be useful to millions of people around the world.
Q: Why are you implementing blockchain technology within the real estate industry?
To fight the major problem associated with the world of real estate investing.
There is a lack of access to deals. If you want to invest globally right now, there’s not a good local platform that allows you to do that. You simply don’t have access to really good deals. Also, you can only invest at the very beginning of the project, or when the project is already yielding through some sort of a fund or REIT. You don’t have a way to liquidate your holdings easily or at any time you desire. So there’s this inherent inflexibility in the real estate world.
Through issuing financial products on the blockchain that represent rights in properties, we can expand on the global nature of assets by embedding regulations and simplifying transactions. Blockchain facilitates transactions, letting us facilitate trade of these financial products and ultimately, letting customers or investors enter and exit projects easily by selling their holdings to another investor.
Q: What is the status of blockchain real estate investment when it comes to legality?
Adding blockchain as the ledger for recording transactions gives you a full transactional history for assets. So it provides regulatory visibility, and it’s much easier to facilitate compliance. Also, all transactions that happen on the blockchain require financial processes such as KYC, AML and sometimes accreditation checks. That must occur because we are issuing financial instruments and therefore our activities fall under the auspices of the Securities and Exchange Commission (SEC) in the US and similar organizations worldwide.
In terms of legality of security tokens: in most jurisdictions around the world, security tokens are a legal instrument. Regulation around marketing such instruments and selling them to various investors, as well as facilitating trade, differ slightly from jurisdiction to jurisdiction. In certain jurisdictions, like China, for example, these instruments are not allowed, but those are a minority. So we just have to be very careful to comply with all the local regulations that guide such transactions on the blockchain.
Q: How does blockchain change real estate ?
The fact that blockchain facilitates trade will increase real estate transactions – in my opinion, times five. So if the market of real estate transactions right now is around $10 billion, I believe that it will grow to $50 billion when there’s liquidity and a level of free trading within the market. That’s something that people will see getting in and out of different assets. Obviously, it might take five to ten years to get to that level, but I think that we are getting there slowly. That’s number one.
Number two, in general, because the liquidity and transparency of digital assets will facilitate the sale of that asset and thus increase the demand for that asset, these factors will give tokenized assets a significant advantage in investors’ view. Obviously, these advantages apply mainly to passive real estate investors. For investors who prefer to actively invest and manage, they might choose to invest directly in real estate. But for those who are investing in real estate with the goal of growing their wealth, passively tokenized real estate makes a lot of sense.
I have an article on why I believe tokenization will increase valuation of assets. And that’s another major plus for blockchain infrastructure.
Q: Is there a global platform for blockchain & real estate ?
At the moment there is no global network of real estate investors and assets where people can freely trade and buy real estate anywhere they want. There are networks like that for stocks and bonds. There are different stock exchanges where people can trade public products freely. Right now, regulation in the US is evolving. In fact, regulations all over the world are evolving.
The regulation that allowed tokenization in the United States was the JOBS Act, which allowed private assets to be traded. Up until then, only public assets that had been released through an IPO and a full prospectus were allowed to be traded on exchanges.
Starting in 2012, you could issue private offerings, which we now call a security token offering, for private offerings that are on the blockchain. These shares could be traded by individuals. At the same time, the blockchain technology was emerging which can facilitate this sort of trade. Blockchain already powers local transactions of cryptocurrencies and it’s also used by every single bank to facilitate cross country money transfers and many other things. In fact, it only makes sense that we should use this technology for global transfer of assets, such as real estate and global trade.
However, there’s a big problem in the regulation of securities around the world; currently, it’s not uniform. Right now security tokens cannot be traded across jurisdictions. So it’s very difficult to be listed on various exchanges that are spread across different jurisdictions. It’s not impossible, but it’s difficult.
The same difficulty applies to crowdfunding in several different jurisdictions for the same token. In most cases, you have to create a separate special-purpose vehicle (SPV), a single-purpose legal entity to facilitate fundraising. The SPV is essentially broken down into parts that are then converted into security tokens, which are then sold to investors. So if we have to establish these SPVs for every single jurisdiction, then the trading becomes super complicated.
So there is a definite need for this kind of global network that can navigate various countries’ regulatory structures. This will give us the ability to take a project and say “Wow, this is a fantastic project. I want to give people access to it.” People in Europe, people in Asia, people in the U.S. This will create a real diversification of capital for real estate owners, as well as for real estate investors.
Q: How could a global platform for selling real estate tokens function?
A global solution would be a platform that will include licenses for different jurisdictions all over the world to raise funds within those jurisdictions. It will offer the possibility of creating one SPV in one jurisdiction and then being able to raise funds globally.
That’s what I would love to see. Alternatively, I would love to see a global regulatory body like we have in the United Nations. It would really help to have a global Securities and Exchange Commission-type organization that would protects investors globally. Q: COVID-19 is enhancing the use of technology in general. What opportunities does this present when it comes to adapting blockchain to real estate?
Right now, people’s appetite for global investment is still the same. In fact, it might have even increased because people have taken funds out of the stock market and are now looking for more stable assets to put them in. But right now, you also cannot travel. That’s problem number one. A lot of people have businesses buying real estate all over the world and those businesses have stopped. With our model, they get to do the same type of thing they would be doing using tokenized securities bought and sold from home.
Another thing to realize is that COVID-19 forces digital transformation upon all of us. Now even industries such as real estate, which is a very old, very traditional industry, is forced to undergo digital transformation. Tokenization is definitely part of that. Making this actually actually a really good time for what we are doing here at SolidBlock.
Regional Chair Athens / Greece at fibree.org