From Sweden to Spain to the UK, more private companies – as well as public bodies – are turning to the fledgling technology, which acts as a shared digital register for transactions made in bitcoin or other cryptocurrencies. By connecting data sources, documents and other types of information, blockchain can improve security, efficiency and transparency within transactions.
So far, it’s the residential markets that are leading the charge in the real estate sector. Earlier this year, a residential property was sold via blockchain in Manchester, while late last year, two UK homes were sold with the use of bitcoin.
After a two-year trial, Sweden’s land registry or Lantmäteriet, is testing blockchain technology for residential property sales which could cut the time taken between signing a contract and registering a sale from months to mere hours.
It’s an early, tentative step for the tool – but could not have been made without some basic elements in place. Essential information – such as property records – needs to be digitally available.
With many of Europe’s national governments and public institutions supporting the wider adoption of blockchain, its rollout could accelerate in years to come.
The UK government last year announced ‘Digital Street’ – its plans to move its land registry to blockchain by 2022. More movement by other European land registries is expected – for example, the Netherlands is considering blockchain technology – but change will not happen overnight.
Ultimately, the implementation and validity of blockchain-based approaches such as tokenized property or smart contracts also depend on, beside the technical aspects, how willing governments are to change their processes and legal frameworks.
All the more important for a broad adoption of this technology, also for the real estate sector, is the indicatory decision of the European Commission to invest heavily in blockchain solutions across all industries. It aims to get all public services to use blockchain technology in the future.
In April, 23 countries agreed a European Blockchain Partnership to exchange experience and knowhow in technical and regulatory fields. It also launched the EU Blockchain Observatory and Forum in February with more than €80 million invested in projects supporting the use of blockchain in technology and society, as well as a further €300 million to be allocated by 2020.
It’s all part of a growing digital society in Europe, where real estate can also learn from how other industries are adopting new technology.
While its potential to alter European real estate for now remains largely untapped, interest from national land registries and the use of blockchain for valuations are steps in the right direction for the technology.