Kunal Bhasin, the co-lead of digital assets at KPMG Canada, believes that institutional investors will start buying blockchain-tokenized shares of high-value commercial real estate as more opportunities arise. Speaking at the Toronto Collision Conference, Bhasin expressed his view that tokenization has the potential to revolutionize ownership of large commercial buildings, traditionally limited to wealthy real estate and pension fund managers.
According to Bhasin, institutional investors such as family offices could soon have the opportunity to own a portion of prominent properties like Toronto’s Eaton Center through tokenization. He anticipated that the tokenization of commercial real estate would emerge as a major use case for the crypto industry in the institutional sector.
While acknowledging the interest of institutional DeFi players in this space, Bhasin pointed out that many of them prefer a more regulated environment for transactions. He stressed the importance of conducting know-your-client checks as a crucial part of the process.
Although the adoption of tokenized real estate is progressing slowly, there have been some notable developments. Bitfinex Securities recently facilitated a tokenized asset raise for investment in a Hampton by Hilton hotel at El Salvador’s international airport. However, the initiative has only managed to raise a fraction of its intended goal so far.
Bhasin is optimistic about the expansion of tokenized Treasurys and money market funds as a bullish use case in the near future. He highlighted the success of the BlackRock USD Institutional Digital Liquidity Fund, which has accumulated significant value since its launch in March.
Despite concerns about reputational risk, Bhasin noted that asset management firms and banks are gradually becoming more open to the crypto space. He emphasized the importance of implementing robust infrastructure and best practices to identify and prevent illicit activities. Bhasin also mentioned KPMG’s collaboration with blockchain analytics firm Chainalysis to combat potential fraud within its client base.
In conclusion, Bhasin emphasized the growing significance of involvement in crypto and digital assets, suggesting that not being engaged in these sectors could pose a career risk in the near future.