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For blockchain technology to gain widespread adoption in an industry as large as real estate, a lot has to play out first.

The prices of blockchain assets are crashing, the processes remain complex, and the U.S. government is eyeing new regulations of and even its own alternatives to the existing slate of private cryptocurrencies.

But some real estate professionals believe the fall of a variety of private tokens may only speed up the process of finding the winning products that could revolutionize the home transaction.

Teresa Grobecker of Grobecker Holland International and Kevin Cottrell of eXp Realty will join a panel at Inman Connect Las Vegas in August to discuss their independent firm Real Estate Consortia and its work to standardize the role of the blockchain in home transactions.

These two and their colleague Sheila Fejeran of eXp all real estate practitioners and executives at Consortia joined Inman on a video call in advance of the conference. Their responses below have been edited for length and clarity.

But first, because this is a confusing and quickly evolving space, lets cover a few terms.

Now, on to Inmans conversation with Consortia.

Inman: In January at Inman Connect New York, Teresa said that replacing intermediaries such as real estate agents is one of the explicit goals of many blockchain enthusiasts. What role might Consortia play in keeping the agent at the center of a blockchain-assisted transaction?

Grobecker: This was my promise to the industry in 2018, jumping off into the national stage. I had no idea what I was getting myself into. I didnt even know Inman and all these things existed. I knew the publication, but events I knew nothing about anything about this space. At the [Real Estate Standards Organization] stage in 2018, I said the promise was to keep the Realtor at the center of this. So when we mint a property nonfungible token, there has to be a practitioner who is the steward to whoever is coming onto the system, to tie that property to the right person. The reason being is, its a relationship-built conversation.

Cottrell: If you look at history, we went through this the first time with the Internet, where people thought that what Expedia did to travel agents was going to happen with real estate agents. And it didnt, because what people realized is, clients want representation. So just introducing blockchain into it doesnt obviate the need for relationships, as Teresa just described. In the Web3 world, or decentralized world, they like to just wipe it clean, and thats just not practical. The expectation is, the efficiency of blockchain will be able to take advantage of what Consortia provides. And if anything we can drive costs out of the transaction, and make it much more efficient, but it doesnt break that linkage [between parties]. We can provide the private blockchain to all of the parties, and still have the public-facing portions that are needed, and do it in a way that youre going to see big adoption in the real estate ecosystem.

One use of the blockchain youve mentioned is hosting a public database of home listings and transactions. Are you describing a competitor of MLSs? And how far are we from seeing it come about?

Grobecker: There is no intention to disrupt the MLS world. I think even when we first launched, there was a lot of fear. Ive been asked this question for the last four years since joining organized real estate. People see a platform where data is shared and the most akin thing we can analogize that onto is MLS. The MLS, I say, is the backbone of financial markets, and at a global scale. The reason why American real estate is so stable is because of the way that the data is collected and stored in the MLS. Consortia has no interest in replicating that system. People have come to me from the MLS world, and they have said, Teresa, consult us on how we would rebuild this on blockchain. It is inefficient, at best. The other side of it is the sales and servicing side of the MLS. We have no intention of going there, so that said, Consortia supplements the kind of data that is available in the housing market, and it puts it in one place.

Fejeran: As she was describing, Consortia is not meant to take over the MLS, or take over the Realtors, or take over any part of the industry. Consortia is to help be a store of data in a more efficient, effective, consistent way of correct information that all parties getting involved in the information will know its true, verified, appropriate, privately held what is appropriate, publicly facing what is appropriate.

How much of Consortias business is as a store of data vs. as an educational resource for agents and others about the blockchain?

Grobecker: Blockchain as a technology enables so many doors to open, and all of a sudden we as practitioners are now dealing with things that have never been on our radar before. So we now have to understand the convergence of SEC laws. We have to know the U.S. Treasury Department financial crimes, their department. That touches on anti-money-laundering laws, and know-your-customer rules. Now we have to say, heres someones crypto wallet. Oh, by the way, wheres this money coming from? Is it coming from the dark web, and the Silk Road? Or is this legitimate funds from someones legitimate wallet? We have to know, are we selling real estate now, or are we selling an SEC-regulated security? For me as a practitioner, especially as a broker, its understanding the convergence of all these laws. I just want to make sure that all my friends stay out of orange jumpsuits. Its really important that theyre all like, OK, these are the laws heres how I stay in my lane and I dont get in trouble.

In recent months, prices of most crypto assets, including NFTs, have undergone a steep decline. Do you think this will affect the timeline for the further adoption of blockchain technology in real estate? Do you think it sets it back?

Grobecker: Forward, actually, and at a rapid clip. And the idea here is that crypto is merely a testing ground for a Fedcoin thats going to be rolled out. And when this project started, that was very conspiracy theory-esque. But the government has since announced that theyre working on Fedcoin. Moreover, in the last couple months, the SEC said they were going to regulate stablecoins. They were going to investigate them, right? And immediately thereafter, stablecoins start to crash. From there, everything starts unwinding, as far as the validity of crypto. And this is actually a beautiful thing. The SEC and the federal government really cracking down is good for the consumer. Them flushing this out is good for the consumer. Its also hardening what will become Fedcoin, and what will become the one or two winners in the actual stablecoin space. So I think everything just moves faster from here in a legitimate, legal way.

Cottrell: I think theres a lot of confusion where people want to equate blockchain with crypto. And thats becoming clear that blockchain is the infrastructure. Its the ledger, if you will; its immutable. That is going to be the infrastructure that moves forward. We may lose 90 percent of the crypto projects. It should remind you of 1999. Over 1999 and 2001, so much went away [in the internet infrastructure]. I expect the same things going to happen to crypto.

Inman Connect Las Vegas kicks off in a little over a month here. Can you give our readers a sneak peak of what you plan to discuss on stage?

Grobecker: As a follow-on to the previous question, probably something thats important to say is the second that Fedcoin or stablecoin, those winners are revealed, 100 percent, all our transactions are on blockchain. So it doesnt matter if you like blockchain, if you hate it thats really irrelevant. Its a matter of, are you ready for it? We as practitioners need to be ready. We need to adapt. We need to educate ourselves, and then be there to service our customers.

Cottrell: Theres a dearth of understanding of the regulatory framework, especially around real estate. Theres a lot of frothy conversations around fractionalization, NFT home sales, and all that. So were going to also touch on that so people understand where we expect the marketplace to go.

Fejeran: The interesting thing is that [a number of influential agents I work with] are hungry for this. They dont understand it, but theyre hungry for it. And theyre hungry for a new application that Consortias going to be doing to sneak peak on the metaverse, since you mentioned it just something that were going to be integrating. Were not going to go into it yet. But just keep your ears out. Thats coming in the future.

Email Daniel Houston

Originally posted here:
Will the Fed kill crypto? Real estate agents plot future of blockchain - Inman