Real estate billionaire Barry Sternlicht is ready to tokenize assets, but says U.S. regulation blocks it
TL;DR
Real estate billionaire Barry Sternlicht says his firm Starwood Capital is ready to tokenize assets but U.S. regulations are blocking progress. He believes tokenization could revolutionize capital raising and access to illiquid markets, calling it 'the future'.
Key Takeaways
- •Barry Sternlicht's Starwood Capital ($125B AUM) is prepared to tokenize real-world assets but faces U.S. regulatory barriers.
- •Tokenization could enable new capital-raising methods and provide investor access to illiquid markets like real estate.
- •Sternlicht compares tokenization's development stage to being earlier than AI's current state, saying 'the world needs to catch up'.
- •Deloitte projects $4 trillion of real estate will be tokenized by 2035, up from under $0.3 trillion in 2024.
- •Institutional investment continues in blockchain infrastructure for RWA tokenization despite crypto market volatility.
What to know:
- Barry Sternlicht, whose Starwood Capital manages more than $125 billion in assets, says the firm is ready to tokenize real-world assets but is stymied by U.S. regulatory barriers.
- Sternlicht argues that tokenizing assets like real estate on blockchains could open new ways to raise capital and give investors access to illiquid markets.
- Praising the technology as "the future," he likens tokenization’s development stage to an earlier stage than that of artificial intelligence and says the world needs to catch up.
- Barry Sternlicht, whose Starwood Capital manages more than $125 billion in assets, says the firm is ready to tokenize real-world assets but is stymied by U.S. regulatory barriers.
- Sternlicht argues that tokenizing assets like real estate on blockchains could open new ways to raise capital and give investors access to illiquid markets.
- Praising the technology as "the future," he likens tokenization’s development stage to an earlier stage than that of artificial intelligence and says the world needs to catch up.
Billionaire real estate mogul Barry Sternlicht said his firm, Starwood Capital Group, which manages over $125 billion in assets, is ready to begin tokenizing real-world assets but can’t move forward due to regulatory barriers in the United States.
“We want to do it right now and we’re ready,” Sternlicht said Wednesday at the World Liberty Forum in Palm Beach. “It’s ridiculous that our clients can’t do it in token,” he said, referring to transacting real-world assets — like real estate — using blockchain-based tokens.
Tokenization refers to converting ownership of physical assets, like real estate or art, into blockchain-based tokens that can be traded. For firms like Starwood, it could offer a new way to raise capital or give investors access to previously illiquid markets.
Putting real estate on the blockchain isn't a new idea, and some other firms are already moving forward on a small scale to make the massive market, which still relies heavily on manual processes, more efficient.
One such firm is Propy, which laid out its plans last year for $100 million expansion to acquire mid-size property title firms across the U.S., aiming to streamline the industry processes.
In fact, consulting giant Deloitte said in a report last year that $4 trillion of real estate will be tokenized by 2035, increasing from less than US$0.3 trillion in 2024. If that becomes reality, that's a 27% CAGR for tokenized real estate.
"Tokenized real estate could not only pave the way for new markets and products, but also give real estate organizations an opportunity to overcome challenges related to operational inefficiency, high administrative costs charged to investors, and limited retail participation," Deloitte said.
'It's a fantastic thing'
Sternlicht also seems to share the vision that tokenization can revolutionize the industry by praising the massive potential of the underlying technology.
“The technology is superior,” he said. “This is the future.
He went so far as to compare the current state of tokenization to artificial intelligence, saying it is far behind where AI is today.
“This is even earlier in the physical world than AI is.” Sternlicht called tokenization “exciting as can be,” saying, “It’s a fantastic thing for the world, the world just has to catch up with it.”
- Some 77% of the survey's 4,658 respondents said they would open a cryptocurrency or stablecoin wallet within their banking or fintech app if one were available.
- A survey commissioned by crypto exchange Coinbase and stablecoin infrastructure provider BVNK also found that 71% of users would use a stablecoin-linked debit card to spend the fiat-linked tokens.
- Stablecoin users on average hold 35% of their annual earnings in such tokens, and 73% of freelancers and contractors reported an improvement in their ability to work with international clients thanks to stablecoins.
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