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Ripple’s real estate tokenization project halted

thu 01 Sep 2022 ▪ 17:00 ▪

5
min reading – per
Cédrick Aimé GUELANG OFALABEN

The collaboration between Ripple and the Colombian administration to tokenize real estate in the country is stumbling. This partnership is facing fierce political resistance, since a new executive has just taken office. The new administration has classified the project in the register of non-priority files. This is a surprising coup, because this project aimed to put an end to the unfair distribution of land for decades in Colombia. As a reminder, the old system set up by Ripple only allowed you to upload a title deed to the XRP registry.

ripple-tokenization-colombia
Colombia’s land tokenization project halted

Ripple’s project to tokenize land in Colombia has stalled

A collaboration between Ripple Labs and the Colombian government for the tokenization of real estate was in the pipeline. The stakeholders in this partnership were the Colombian national land agency, Peersyst Technologie (known for software development) and Ripple. The idea was simple: to facilitate the property search process in complete transparency, with price accessibility and effective monitoring of financing and payment.

But, following the change of administration, it seems that not everything will go according to plan. Indeed, Ripple’s project has just left the field of priority issues and may never see the light of day at the pace things are going. This comes only some time after the announcement of the project by the Colombian minister of Information Technology and communications of the former government. Two weeks after, Gustavo Petro, the new president, was winning the elections with the intention of turning everything upside down.

The old regime in place maintains that with a register visible to all, the distribution of land will be more seamlessly. An idea that does not seem to convince the new government, which would rather implement a new reform. In it, the state will be able to purchase the land used illegally or simply unused. Once this is done, he will then be able to redistribute them to rural farmers. The acting director of the National Land Agency, Juan Manuel Noruega Martínez, did not fail to point out, speaking about the tokenization of real estate, that : “This is not one of the projects defined in the PETI [Plan Stratégique des Technologies de l’Information] ».

Why this reversal of the Colombian government?

This blockade by the Colombian government is not helping the farmers’ business, but especially Ripple’s. The Ripple crypto project is currently in the middle of a legal battle with the SEC over facts that date back to 2020. Indeed, the American financial watchdog is suing Ripple Labs for alleged sales of the XRP without it being registered as a security. The SEC is quite firm, Ripple according to it would have used XRP as a means of transferring funds rather than an investment.

A case that has not yet come to an end and that has certainly had an impact on the Colombian administration. Indeed, such a change is surprising, especially since the new president has already shown affection for the cryptocurrencies. In addition, the 2016 peace agreement is favorable to the formalization of titles. This formalization makes it possible to restore formal rights to farmers on the land. With such a lack of precision, farmers will be less inclined to invest in land. Even worse, no bank will want to give them credit. You should know that these lands cannot be guaranteed.

Conclusion

Ripple is facing the reluctance of the Colombian administration for the tokenization of real estate. With the new executive, the whole project, which was on track, was abandoned. To the dismay of the farmers, who will still have to wait before their situation improves.

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Cédrick Aimé GUELANG OFALABEN avatar
Cédrick Aimé GUELANG OFALABEN

PhD student in financial law and experienced SEO web writer, Cedrick Aimé is passionate about cryptocurrencies, trading, etc. He naturally participates thanks to his articles in the blockchain revolution on a daily basis for a better democratization of DeFi.

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