Blockchain Technology Used to Close Real Estate Deal in VT, And CO, AZ Are Next
Online real estate marketplace Propy Inc. and the city government of South Burlington, Vermont, this week conveyed the first parcel of U.S. real estate using blockchain technology, and the upstart Palo Alto, Calif.-based firm predicts property deed recorders in Colorado and Arizona are poised to conduct the next blockchain-powered real estate deals.
The South Burlington-Propy pilot project included input from the Burlington based legal team of Gravel & Shea — a practice of attorneys focused on the IP law aspects of commercial development using blockchain technology.
Propy’s technology team includes blockchain engineers recruited from Fortune 5 companies who specialize in designing cryptographically protected security systems.
A pilot project among the partners was announced just in January, and this week’s transaction is its first completed deal.
“The City of South Burlington is always interested in taking advantage of technology that enhances its delivery of services to residents,” said Donna Kinville, City Clerk, South Burlington, Vt.
Propy positions itself as a “global property store,” with a decentralized title registry. The company last summer completed an ICO. The online retailer will rely on the Propy Registry, built on ethereum blockchain to track global real estate ownership. The firm’s ICO last August raised $15 million.
The firm was founded by Natalia Karayaneva.”We are very proud of what we’ve accomplished,” Karayaneva said in an TV interview in Russian. “This is only the beginning. With this transaction, we’ve broken first ground in putting the $217 trillion real estate market on the blockchain.”
According to papers filed by the company, the company also offers PRO, a utility token to enable the development of a “thriving, self-sustaining ecosystem around this database” for token holders.
Prior Deal in Ukraine
The Burlington, Vt. deal was Propy’s first American transaction, after hosting the debut purchase of real estate using blockchain last fall in the Ukraine, for a $60,000 apartment in Kiev. TechCrunch founder Michael Arrington purchased the Kiev condo remotely, and is said to be on the board of directors of Propy.
“The announcement of a pilot project to utilize blockchain technology in real estate transactions is emblematic of Vermont’s long history of innovating business, insurance, and financial technology,” said Vermont Agency of Commerce and Community Development Secretary Michael Schirling. “We are fortunate to have a cutting edge statutory framework that enables the use of blockchain technology, and we will continue to work with the legislature to ensure Vermont remains at the forefront of these innovations.”
Currently, Propy has a total market cap of around $17.7 million according to CoinMarketCap. The company currently trading for a little more than $1.00, down around 5.3 percent over a 24-hour period.
South Burlington, Vt. began testing Blockchain technologies for use in recording real estate documentation in January. Ukraine’s Agency for E-Governance also started a pilot project with Propy in August 2017, offering properties to foreign investors on Propy’s online marketplace.
The technology offering by Propy promises to “revolutionize” the real estate purchasing and registration process globally by creating blockchain-based technologies. The firm’s blockchain-enabled platform comprises an online and mobile “global real estate property store and a transaction recorder” for the remote handling of fiat and other cryptocurrency payments, and a land records registry that is “free of jurisdiction.”
The company has offices in Palo Alto, Calif., Bulgaria, and the Ukraine.
According to a statement by the company, executives of Propy, as well as government officials in Vermont, at both the state and the local level, and lawyers there, are going to “continue to study and develop public policy” for the support, and growth of a sustainable and diversified economy in that state around the blockchain technology sector. One expert said that this business model – and at least one other competitor is in the market against Propy – will likely challenge the title insurance market, which could disappear if it does not respond quickly to the technology challenge.
–Gene Koprowski is an Emmy Award-nominated technology journalist for his interactive TV work for FoxNews.