Digital investments startup Fundament Group now has permission from top German financial watchdog BaFin to launch a €250 million euro offering of real estate bonds tokenized on Ethereum.
With the regulator’s approval announced by the company on July 23rd, Fundament can move forward on its planned public sale of Fundament Real Estate Tokens.
Those tokens are “a digital security backed by German real estate with a focus on commercial,” the project’s landing page reads, and they emphasize turning illiquid real estate into liquid investments via the ERC-20 token standard.
First of Its Kind, But Surely Not the Last
Per the project’s prospectus, each Fundament Token will have a nominal value of €1 upon issuance.
Investors can use euros, dollars, ether, or bitcoin to participate in the offering. Those who don’t pay in cryptocurrency will receive their token allotment in a hardware wallet.
The token’s dividends will be paid out annually every July 31st, with the project’s planned rate of return being between four and eight percent. The bond’s final repayments will take place by December 31st, 2033.
Next up on the slate for the company is the actual public sale. Fundament hasn’t specifically disclosed when the offering will begin, though sign ups are currently open on the Fundament website. The company will reportedly start marketing the coming token in August.
“We are excited to enter the sales process for the Real Estate Security Token, while already preparing the tokenization of other highly attractive assets,” Fundament co-founder Florian Glatz said on the news.
Notably, BaFin’s greenlighting of the Ethereum-based bonds is unprecedented in the country because it marks the first time a real estate token has been approved in Germany. As a BaFin spokesperson noted to CoinDesk:
“It has indeed been the first time we have approved a prospectus regarding blockchain-based real estate bonds, but not the first time in respect to blockchain technology as such.”
March of the Ethereum Bonds
The Fundament news echoes Societe Generale’s April announcement, in which the bank revealed it was conducting an offering of €100 million in bonds tokenized atop Ethereum.
Societe Generale, known more popularly as SocGen, is among the 20 largest banks in the world, currently clocking in as the third largest in France and the sixth largest in Europe.
Accordingly, its status as a major bank made its planned security token offering generate waves in Ethereum’s nook of the cryptoeconomy, with stakeholders hailing the news as a sign Ethereum was making headway into mainsteam society.
The bonds, dubbed OHF tokens, were given a Aaa by Mood’s rating service. In their announcement, SocGen said the digital bonds pointed toward a new future for capital market activities:
“Many areas of added value are predicted, among which, product scalability and reduced time to market, computer code automation structuring, thus better transparency, faster transferability and settlement. It proposes a new standard for issuances and secondary market bond trading and reduces cost and the number of intermediaries.”
The high-profile embrace isn’t bad for a blockchain platform that just celebrated the fifth anniversary of its crowdsale this month.
Ethereum Just Had Its Birthday
“Still astonishing to reflect on how far we have come,” Ethereum co-creator Joseph Lubin reflected on Twitter. “We willed an idea into being, built a vibrant community, and spread the ethos of decentralization to the world.”
Happy Birthday, ◊! 5 years ago, on July 22, 2014, the #Ethereum dream began.
Still astonishing to reflect on how far we have come. We willed an idea into being, built a vibrant community, and spread the ethos of decentralization to the world. 5⃣????????https://t.co/bcanu2NotJ
— Joseph Lubin (@ethereumJoseph) July 22, 2019
And with age comes experience. As of last week, the Ethereum network has processed more than 500 million transactions to date.
To that end, the smart contract platform has proven itself viable enough for major institutions like SocGen to build on. What will be interesting to see is how the blockchain’s adoption looks another five years from now.