French Tech Firm Unveils Tool for Blockchain-recorded Real Estate Transactions
French tech firm Blockchain Partner has created a tool which enables real estate transactions to be recorded on the Ethereum blockchain. To demonstrate the features of the product, the firm replayed a major French real estate transaction from 2017.
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Major Parisian Real Estate Transaction Gets “Replayed”
According to French business journal Les Echos, the demo put all of the information of the 2017 sale of the IN/OUT building — a landmark of southwest Paris dating from the early 20th century — onto Ethereum’s blockchain. In doing so, Blockchain Partner worked with both the buyer, Primonial REIM, and seller, Société Foncière Lyonnaise, as well as other parties involved in the transaction, such as notary firm Oudot & Associés and real estate agency HBS Research.
Antoine Yeretzian, founder of Blockchain Partner said:
“Recording (real estate transactions) in the blockchain allows agreement on the chronology of the documents, of assuring that they were not modified and thus that everyone is referring to the same content.”
Blockchain Partner has already conducted several financial services projects with French banks and worked in the transport sector with SNCF, the French national railway. In addition, Blockchain Partner offers legal compliance and initial coin offering (ICO) consultancy services.
Multiple Benefits of Putting Land Registers on a Blockchain
There are multiple benefits to be had from using blockchains in land registries. First, digital records are more difficult to destroy, especially if there are many nodes that are widely dispersed. In the case of disaster or war, having digital records safely stored on a computer outside the region or country could allow for the reestablishment of property rights during a rebuilding phase.
Second, property transactions can be made more efficiently using blockchains. Michael Sigda of HBS Research said that by using the tool created by Block Partner, sales of the likes of the IN/OUT property, which would otherwise take six months to complete, could be done in two months.
Third, land registries on a blockchain could be established in such a way as to make them transparent, readily verifiable, and publicly accessible. This serves to increase trust between parties and thus facilitates efficient transfers and economic activity.
While the benefits are many, the barriers to entry are extremely high, as the governmental bodies in charge of land registries must accept that records on a given blockchain system are legally binding. However, there are several jurisdictions that have already begun experimenting with real estate blockchain systems.
Sweden, Georgia, and India Working on Pilot Projects
One of the most ambitious cases is in Sweden, where a medley of finance firms, tech companies, real estate players, and the government land registration authority — Lantmäteriet — have been working on a pilot since early 2017.
Last week, it was announced that the third phase of testing had been completed. It involved a transaction which used a smart contract that was compliant with European Union laws. Still, laws in Sweden would have to be changed in order to have digital signatures become binding, so there’s still a lot of work to be done before the system is used in practice.
Another country experimenting with land registries and blockchain technology is the Republic of Georgia, which formed a partnership with Bitfury in 2016. In 2017, the country began officially storing land records on a blockchain. And in Asia, India has also begun a pilot to do a similar thing in the Andhra Pradesh Capital region.
What’s your take? Will blockchain become the normal way for real estate transactions to be recorded in the future?
Images via Pixabay