This promise is seductive. With just a few clicks, you can buy a piece of real estate, invest in a piece of a luxury building, and easily sell this stock later. Everything is recorded on the blockchain.
In Brazil, the discourse of democratizing real estate investment and reducing bureaucracy is driving the tokenization of real estate. But that enthusiasm stands in contrast to what remains an uncertain legal scenario and risks far beyond the crypto market.
In practice, tokenizing an asset means converting it into a small digital unit (token) that represents a portion of the value or rights of the asset.
Proponents of tokenization argue that this model can open up the real estate market to new investors and reduce intermediaries.
Meanwhile, real estate law experts warn that people should be careful about confusing digital representation with real estate law.
Felipe Melazzo, Vice-President for Legal Affairs at Cbic (Brazilian Chamber of the Construction Industry), says technological innovations have the potential to transform the sector, but full regulation is needed to guarantee trust and stability for all involved.
“Tokenization still does not replace traditional registration systems and remains the only legal means of transferring assets in Brazil,” he said.
What is real estate tokenization?
Asset tokenization refers to converting physical assets, such as buildings, land, or corporate slabs, into tradable digital units called tokens.
These tokens are registered on blockchain, a technology that acts as a ledger that allows each transaction to be tracked and verified, and represent economic rights associated with the asset, such as participation in revenue or the promise of profitability.
In theory, investors can buy, sell, and receive income proportional to their tokens as if they owned a small piece of real estate.
Example: A property worth 1 million reais can be divided into 1,000 tokens of 1,000 reais each. Each buyer acquires the economic part, but not the registered real estate.
However, there are no concrete regulations yet.
Does tokenization give you ownership of the property?
no. Under Brazilian law, ownership of real estate can only change by registering it with the Real Estate Registry in accordance with the Civil Code.
The token itself does not replace registration. Those who purchase tokens typically obtain economic rights, which are promises of income rather than actual rights to property.
Real estate registration is the only legal means of securing property in Brazil.
Is real estate tokenization legal in Brazil?
Although it is not prohibited, it is practiced in a gray area. If the tokens constitute securities, the platform will operate supported by private contracts and general capital market regulations.
The CVM (Security Committee) has already warned that certain structures may require registration and supervision.
The Cryptocurrency Law (14,478, 2022) regulates virtual asset service providers, but does not define specific rules regarding the tokenization of assets.
The currently permitted tokenization is limited to digital assets based on mandatory rights, such as investment contracts that give rights to a source of income (such as rent), but do not represent direct ownership of the asset.
There was an attempt by Cofeci (Federal Council of Real Estate Brokers) to regulate this topic in August 2025, but the regulation was blocked by a federal court in October of the same year.
What advantages do advocates of this model point to?
- entry value is low: You can invest for just a few thousand reais.
- Diversification: Investors can invest in a variety of properties without purchasing the entire property.
- potential liquidity: In theory, tokens can be traded faster than physical assets.
- reduction of bureaucracy: Part of the process is automated by smart contracts
What are the risks of real estate tokenization?
1. Legal uncertainty
- Tokens do not transfer ownership
- Without actual registration with the registry, investors will only have mandatory rights, or a promise of remuneration.
2. Lack of specific regulations
There are no clear standards regarding:
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How to register a token linked to real estate
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How the relationship between token and property registration works
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Whether the issuance of a token is a security
3. Taxation without rules
- There is no standardization regarding the taxation of capital gains or income from real estate collateral tokens.
4. Uncertain liquidity
- Despite advertising, the secondary market is still small. It may take several months for investors to resell their tokens.
5. Risk of conflict with physical properties
- Pledges, adverse possession, debts, and legal disputes regarding property can affect token holders even if they have no real rights.
- The traditional notary system is popular because there are no clear rules linking tokens to real estate registries.
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