Largest Private Investment Bank in Latin America Issues Real Estate Tokens on Tezos

Banco BTG Pactual, the largest private investment bank in Latin America is moving some of its real estate-backed security tokens over to the Tezos blockchain.

Banco BTG Pactual is issuing its security tokens representing investment in real estate on the Tezos (XTZ) blockchain. 

Previously, the bank had issued its ReitBZ tokens on the Ethereum blockchain, raising $10 million in Ether (ETH) and Gemini Dollars (GUSD). 

Which blockchain will prevail in the future?

Andre Portilho, head of digital assets at BTG Pactual, told Cointelegraph that $5 million worth of ReitBZ will be switched to Tezos, including the $2.5 million new raise that was conducted in fiat. The reason behind this diversification is that the bank wants to have its options open, as there is no way of telling which blockchain will prevail in the long run:

“We don't want to be tied to just one blockchain. Because clearly I cannot tell which blockchain blockchain will prevail. <...> We want to have other options, other blockchains that might serve better the pieces of tokenization and issuing tokens that represent real assets.”

Comparing the cost of the digital asset issuance versus the traditional paper approach, Portilho noted that the former might have turned out to be a little bit more expensive, but it provides certain advantages and infinite scalability — issuing $10 billion worth of securities will cost roughly the same as $10 million.

Liquidity is the key

BTG Pactual considered working with service providers like Securitize, but decided to do it themselves in order to learn the ins and outs of issuing digital securities. According to Portilho, the bank’s ultimate goal in the undertaking is to reach the maximum potential clientele:

“At the end, as a bank, going into digital assets, we want to discover the best technological solution for us to be able to increase potential audience for our products.”

The bank is currently working on listing its security tokens on some newer up and coming exchanges in Asia, as liquidity for this type of digital assets remains its Achilles heel.

Publication date: 
05/19/2020 - 16:00
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