Understanding what real estate tokenization is and what the risks are – 11/10/2025 – Market

The promise is tempting: buy a piece of real estate in a few clicks, invest in a piece of a luxury building, and who knows, easily sell this share later – all recorded on the blockchain.

Real estate tokenization has begun to gain more popularity in Brazil, with the rhetoric of democratizing real estate investing and reducing bureaucracy. But this enthusiasm contradicts the still cloudy legal scenario and the risks that extend beyond the cryptocurrency market.

In practice, tokenizing property means converting it into small digital units — tokens — that represent a small fraction of the value or right to the asset.

Proponents of tokenization say this model could open up the real estate market to new investor profiles and reduce disintermediation.

While experts in real estate law warn against confusing digital representation with property law, which requires caution.

Felipe Milazzo, Vice President of Legal at Cbic (Brazilian Chamber of the Construction Industry), believes that technological innovation has the potential to transform the sector, but full regulation is required to ensure trust and stability for all concerned.

“Coding still does not replace the traditional registration system, which remains the only legal means of transferring ownership in Brazil,” he says.

What is real estate tokenization?

Tokenizing property means converting physical assets — such as a building, land, or a company nameplate — into tradable digital units, called tokens.

These tokens are recorded on the blockchain, a technology that acts as a ledger that allows every transaction to be tracked and verified, and represent the economic rights associated with ownership, such as revenue sharing or the promise of profitability.

In theory, an investor can buy, sell or receive income proportional to his token, as if he owned a small piece of property.

Example: A property worth R$1,000,000 can be divided into 1,000 tokens worth R$1,000 each. Each buyer gains an economic portion, but not the registered property.

However, there is still no specific regulation.

Does coding give the right to ownership of the property?

no. Under Brazilian legislation, ownership of a property changes only through registration in the Land Registry, in accordance with the Civil Code.

The token itself does not replace registration. Whoever buys a token typically gains an economic right, the promise of income, not the actual right of ownership.

Title registration is the only legal means of guaranteeing ownership in Brazil.

Is real estate tokenization legal in Brazil?

It’s not banned, but it operates in a gray area. Platforms operate with the support of private contracts and public capital market regulation, when tokens constitute securities.

The CVM has already warned that some structures may require registration and supervision.

The Cryptocurrency Act (14,478, 2022) regulates virtual asset service providers, but does not specify specific rules for tokenization of properties.

Tokenization allowed today is limited to digital assets based on mandatory rights, such as investment contracts that grant the right to sources of income (such as rents), but do not represent direct ownership of real estate.

There was an attempt by Covesi (Federal Council of Realtors) to regulate the subject in August 2025, but the rule was suspended by the Federal Court in October of the same year.