Blockchain continues to disrupt the EU real estate market. Just this week, the Tokyo-based investment bank, MBK announced plans to tokenize the sale of a property in Estonia. The news follows the greater trend of traditional financial institutions entering the blockchain space via a tokenized real estate STO.
According to company documentation, MBK created a strategic partnership with the Singapore-based real estate firm BitofProperty (BOP). BOP's unique approach to the market made the firm well-known in the region. BOP specializes in fractional ownership of EU real estate.
The firm breaks down acquired property rights into smaller shares that are then offered to investors. Investors receive dividends equal to the number of shares they hold in a particular property. This strategy allows investors to diversify their holdings.
For its part, BOP will handle the acquisition of the properties. Then, the firm will fractionalize ownership rights and tokenize the shares. The company will work alongside MBK to ensure the tokenized shares are compliant with the current EU regulations.
Once the tokenization of the property is complete, MBK will offer the new financial instruments on its subsidiary – Angoo FinTech. Angoo Fintech is an Estonian company acquired by MBK a few months prior as part of the firm's EU repositioning strategy.
MBK Strategic Partners
Notably, MBK signed a deal with the Hong Kong Stock Exchange-listed firm, BS Securities to further develop the company's Asian market positioning. MBK is already a business powerhouse in Japan and China, but company executives hope to utilize this new tokenization strategy to catapult the firm into the forefront of the EU market.
The Growth of MBK
MBK is a Tokyo Stock Exchange-listed merchant bank. In 1974, MBK entered service under the name West Japan Spinning & Weaving Co., Ltd. Since that time, the organization has grown to become a premier banking institution in Asia.
Estonia continues to show the world its pro-crypto aspirations. Back in 2018, the country was among the first jurisdictions in the European Union to legalize crypto-related activities. The Estonian Financial Intelligence Unit (FIU), the regulator issuing crypto-related licenses, approved almost 900 firms since that time.
Estonia received praise for its easy-to-navigate registration process. Some blockchain-based firms reported that they received their licensing in only one or two weeks. The only catch is that the licensed would revoke if the company did not start operations within six months of receiving approval.
Two Estonian Crypto Licenses
Estonia broke down their licenses into two main categories. The first was for firms which operated digital asset exchanges. Of these companies, 500 received licensing. Additionally, 400 wallet providers received approval to date.
Unfortunately, the Ministry of Finance introduced changes to the licensing process on May 3, 2019. The changes extended processing times from 30 to 90 days. Additionally, it established the requirement for all companies to operate a branch in Estonia. Additionally, the registered office address and the board of directors now need to be located in Estonia. Lastly, the state fee for the emission of the license increased from €345 ($386) to €3,330 ($3,729).
MBK – A Tokenization Strategy to Win
As it stands today, MBK has a strong position in the Asian market. The firm will soon extend that reach into the EU markets through this latest maneuver. You can expect to see more tokenization projects emerge from this innovative firm in the coming months.