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The Moscow Exchange has indicated its intention to list digital financial assets (DFAs) on its platform, specifically those relating to real estate, before the end of 2024.

Local news outlet Izvestia reported that plans are already at an advanced level, with the Bank of Russia approving 10 entities to operate as DFA issuers. The firms include Sberbank of Russia (NASDAQ:SBRCY), Alfa Bank, Atomize, Lighthouse (NASDAQ:LHGI), and St. Petersburg Exchange.

Sergei Kharinov, director of digital assets at the Moscow Exchange, stated that through the use of real estate DFAs, construction companies will be able to access additional funding sources outside of banks and mainstream financial institutions.

Kharinov added that the new class of investment products comes with the benefits of fractionalization, reducing the barrier of entry for investors. The director added that the possibilities of fractionalization stemming from tokenization would increase liquidity for the asset, with the DFA’s expected to “be in the form of monetary claims against the issuer.”

Several property developers are reportedly rolling out their real estate DFAs once the Moscow Exchange gives the green light for listing.

“Such tools will help attract a wide range of investors with small checks to real estate investment,” said Denis Kongrakhin, a player in the local industry. “In addition, the asset will grow along with housing prices, which will provide an opportunity to protect against inflation and, for example, save up to buy an apartment.”

Apart from opening the floodgates to retail and institutional investors, the DFAs have been hailed for their transparency, following blockchain as the underlying architecture.

Three real estate DFAs have been rolled out under the Atomize platform, offering investors a minimum return of 10% and the potential for even higher profits. Entry prices for each DFA were pegged at 99,000 rubles ($1,000), with analysts noting their similarities with government bonds.

While Atomize’s listings provide for guaranteed levels of payments, it remains unclear if other DFA will include similar protections in other use cases.

Real estate tokenization garners major interest

In Japan, Mitsui & Co Digital Assets (NASDAQ:MITSF) floated a platform that allows users to invest in real estate without the need for traditional third-party players to use tokenization at the core.

Meanwhile, Israel’s land registry has confirmed plans to establish an exchange to trade tokenized real estate.

“By tokenizing these assets and using blockchain rails, real estate transactions can be nearly instantaneous and can occur directly between two parties anywhere in the world,” said Roi Karo, head of risk and strategy at Fireblocks.


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