Global firm Zventus recently revealed that it would launch a blockchain lab for the financial services industry with a specific focus on “modernizing the mortgage sector.” The firm said the initiative will develop new products, services, and solutions to enhance the loan process to make loan processes more secure and economical.
Zventus says its Mortgage Blockchain Lab, which brings together mortgage domain experts, tech partners, and universities focused on blockchain R&D and delivery, could reduce costs for financial services firms by up to 50% per loan. It is targeting the creation of 1,000 new blockchain tech jobs by 2024.
“There’s no doubt in blockchain’s ability to disrupt the mortgage industry,” said Angel Alban, President at Zventus. “The capabilities of a secure, transparent ledger without a central intermediary is taking off in Europe and Asia and gaining significant traction in the Americas. We’re thrilled to be at the forefront of a technological revolution that will transform mortgage processing forever.”
The announcement comes at a time when cryptocurrencies are exploding in popularity and CRE owners warm to the idea of using them as a form of payment from tenants and in deals while pricing volatility is also spiking. But uncertainties and risks may prevent widespread adoption in the near future, some experts say.
“[Bitcoin’s] volatility creates a realistic concern that the Bitcoin that is accepted for rent on day one could lose a large percentage of its value on day two, although, of course, there is also the possibility that the value of the accepted Bitcoin might instead surge on day two,” Andrew M. Ouvrier, a partner at Cox, Castle & Nicholson LLP, told GlobeSt earlier this year. He also said investors are concerned that the market, which is currently unregulated, could see increased government regulation.
“There is also concern that U.S. regulators may be ready to tighten their oversight of digital currency and related businesses, which may have a chilling effect on cryptocurrency-based transactions,” he says.
But Gary A. Glick, a partner at Cox, Castle & Nicholson, says he thinks Bitcoin will become increasingly common as a form of payment over the next decade. “It appears as if consumers may also be more likely to adopt Bitcoin and other cryptocurrencies on a mainstream basis,” he says. “Therefore, it will likely be the case that those commercial property owners who have Bitcoin and other cryptocurrency policies in place will likely have a competitive advantage among shoppers and prospective tenants who also adopt the use of Bitcoin and other cryptocurrencies.”
Earlier this spring, investment firm KPG Funds announced its tenants could pay rent using digital currency at 446 Broadway L’Atelier, a commercial and retail development in Soho. And in San Francisco, a co-living space owned by early bitcoin millionaire Jerad Kenna is using NFTs to allow people to bid on 75-year rights to lease a room for $1 a month.