The Fraction Company will allow Thai investors to acquire fractions of high-end real estate projects starting from a minimum investment of USD 150.
The Securities and Exchange Commission (SEC) of Thailand, the first financial regulator in that Asian country, gave a license to a real estate tokenization project based on the Ethereum network.
Fraction, a subsidiary of Hong Kong-based fintech company Fraction Group, received a license from Thai regulators to work on a fractional share token offering feature. The company revealed the news through its website.
The CEO highlighted the pride of its entity during the announcement of the first SEC-regulated unified platform that leverages the blockchain to digitize, list, and exchange tangible assets.
Tokenization is a New Reality in Thailand
According to the information, the new license brings Fraction permission to build asset digitization and fractioning service, known as an initial fraction offering (IFO).
The firm intends to gather up the first IFOs for subscriptions in the first quarter of 2022, focusing on tokens for properties in collaboration with various local real estate firms. According to the announcement, Fraction would be exploring an IFO with an additional value that could surpass USD 460 million.
According to the company, this project would intend to democratize investment and acquisition of real estate by reducing the entry barrier for investors.
The CEO of Fraction explained that the minimum amount to participate in the IFO would be circling 5,000 Thai baht, which is about USD 150.
The general director of the partner company Magnolia Quality Development Corporation, Visit Malaisirirat, highlighted that, for the first time in the world, investors could purchase and sell real estate through digital tokens on a unified platform that encircles all steps. The CEO also reassured that this model could skyrocket the real estate sector and many other industries shortly.
A Potential, and Very Succesful Industry
Fraction is not the only company worldwide that is currently dabbling in property tokenization. In the United States of America, the New York-based company Fluidity has been working hard to tokenize and trade real estate through the Ethereum blockchain.
In 2018, a report mentioned that this company, in association with the firm Propellr, carried out a real estate tokenization project in a residential complex in Manhattan that went valued at USD 30 million.
More recently, Fluidity has also dabbled in offering Blockchain-backed mortgage plans. Despite these developments, the tokenized property industry has remained relatively closed due to the growing state of technology and regulatory uncertainty about offerings of this type.
According to the situation in Thailand, this actual movement could become quite a lucrative sector in the future.
On the other hand, and according to a set of evaluations from the British accounting network Moore Global, the tokenized property market could reach USD 1.4 trillion in the next five years if only 0.5% of the global property market gets tokenized.
By: Jenson Nuñez
