Fundament, a blockchain startup, received the green light for issuing the first tokenised real estate based on the Ethereum blockchain. The Berlin-based company has obtained the approval of BaFIN, the German financial regulator, which has given its approval to the sale of Ethereum-based tokens for 250 million euros.
Open sale without any restrictions
The token will be available for sale to any retail investor with no minimum investment and residence restrictions.
A BaFin representative reported to the press:
“We can confirm that we granted approval for a Fundament Group prospectus. 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.”
The token, which Fundament will start marketing next month thanks to BaFin’s approval, will be based on Ethereum’s public blockchain using the ERC-20 standard.
Florian Glatz, co-founder of Fundament Group, added:
“The reason we went through this long tedious process with regulators was to get rid of any restrictions. Normally these projects are limited either by the minimum investment amount, which would be north of €100,000 or limited heavily in the amount of investors you could have. So it’s the first really like mass-market tokenized real estate for the world.”
Ability to purchase with fiat currency
The success of the Fundament token will depend on the implementation of five construction projects, three in Hamburg, one in Frankfurt and one in the university town of Jena. The company expects a medium-high return on the projects.
“Holding a token enshrines a legal claim of the holder against the issuer of the bond to pay them an annual dividend of around 4-8 percent”.
To comply with the Know-Your-Customer (KYC) and AML regulations, IDnow will verify the identities of potential buyers. The process of acquiring the token takes on average three minutes, according to Glatz.
Buyers will be able to buy the tokens using BTC, ETH, US dollars or euros. For those paying in fiat currency, Fundament will deliver the tokens on a prearranged hardware device.