Brazil: First “institutional token” yields dividends

Brazil: First “institutional token” yields dividends

With the ReitBZ token, the largest investment bank in South America wants to tokenize real estate on the block chain. Dividends in the amount of 87,500 US dollars will allow investors to participate in the increase in value of the real estate without having to buy an entire property.

Brazil has always been a great market for blockchain technology and cryptocurrency, last year, the largest investment bank on the South American continent, BTG Pactual, already caused a sensation with regard to security tokens.

Now it is tokenizing real estate on the Blockchain with its “leveraged” token, ReitBZ, as the first bank on the continent. The token also distributes profits to investors. The total dividends paid out amount to 87,569.20 US dollars. In addition, the payouts will be made via a Smart Contract using the Tezos block chain.

Security Token Offering: The bank relies on Tezos

BTG Pactual came to the Tezos block chain with the aim of converting a large part of its real estate portfolio into security tokens.

This in order to attract new investors via new sales channels and to let them participate in the success. For example, cheap real estate in the Brazilian metropolises of Rio de Janeiro and São Paulo can be bought and tokenised in this way.

This allows investors to participate in the increase in value of the properties without having to take an entire property into their portfolio – a classic use case for security tokens. If you want to learn more about the pros and cons of security tokens like the ReitBZ, please have a look at our tutorial.

Roberto Sallouti, CEO of BTG Pactual, said

We are constantly investing in innovation and cutting-edge technology. ReitBZ is proof that our efforts in this direction have brought good returns for our customers.

According to the press release, BTG Pactual purchased 322 units and resold 198 units between August and December last year.

In May this year, ReitBZ began issuing on the Tezos block chain platform.

With technology and globalisation, we have now reached new frontiers in various areas of our lives, but when it comes to investment, we still think very locally. ReitBZ is a product that changes this way of thinking.

added André Portilho, BTG Pactual’s partner in charge of the brand.

Tokenising real estate on the Blockchain

Real estate is a good example of how tokenization works: The value of a building is securitized in the form of tokens, broken down into small units and implemented through a smart contract.

This can include a regular interest payment or a specific right of use. There are many block-chain projects in the real estate environment – real estate developers not only tokenize existing properties, but also finance entire construction projects via STOs.

Raising funds through an STO is now considered an efficient and cost-effective alternative to traditional financing, not only among block chain enthusiasts.