Real estate fraud is endemic worldwide, costing investors trillions of dollars each year as corrupt officials team up with unscrupulous commercial operators to defraud unsuspecting users. In Africa, the problem is exacerbated by poor record keeping and slow arbitration and court processes.
Blockchain has long been touted as the ultimate solution to land fraud, and Nigeria’s largest city, Lagos, is finally putting its money where its mouth is.
According to local publications, the Lagos State government has partnered with a consortium of local technology companies to roll out the blockchain-based land registry system over the next 18 months.
The system is based on tokenization; users will convert their physical real estate property into a digital representation on a blockchain network with key details such as title, ownership, and transaction history. Once the land ownership changes hands, the changes will be reflected on a transparent and immutable network, making it easier for legitimate buyers to prove their ownership.
Lagos joins a handful of other jurisdictions on the continent that have turned to decentralized ledger technology (DLT) to rid the real estate sector of rampant corruption. They include neighboring Ghana and East Africa’s largest economy, Kenya.
The big difference for Lagos is government support. In other African countries, it was the private sector that supported the transition, which slowed it down and hampered its adoption by the general public.
In addition, powerful cartels within government, who have benefited from the opacity of the paper system, have resisted digitization efforts. In Kenya, for example, the lands ministry estimated that real estate corruption and fraud cost the country 60 billion Kenyan shillings ($470 million) a year.
In South Africa, digitizing land titles through blockchain could have an even greater impact. President Cyril Ramaphosa announced last year that his government’s backlog in processing land titles exceeded one million households, equivalent to more than 242 billion rand ($14 billion) in assets.
South Africa’s financial sector has joined the movement. FNB Bank, one of the Big Four banking groups, has been exploring blockchain to help its customers secure their electronic property titles, its CEO Jacques Celliers said last year.
Furthermore, Nigeria has continued to make remarkable strides towards digitalization, as evidenced by the 2023 Digital Nigeria International Conference. Members of the BSV ecosystem, such as VX Technologies’ Executive Director of Global Partnerships, Dr. Catherine Lephoto, and Centbee’s CEO and Co-Founder, Lorien Gamaroff, were present on the conference’s center stage, where they discussed blockchain adoption opportunities in Nigeria.
“What this means for us as Nigerians and as a country is that we want to see broad adoption of blockchain technology in our private and public sectors,” Gamaroff told CoinGeek.
UAE welcomes first regulated digital market
Elsewhere, the United Arab Emirates (UAE) welcomed its first regulated digital marketplace after the Abu Dhabi Global Market (ADGM) issued eight licenses to Finstreet.
Finstreet is a subsidiary of Rorix Holdings, which is owned by the International Holding Company (IHC), the second most valuable conglomerate in the Arab States after Saudi Aramco.
ADGM has licensed three subsidiaries: Finstreet Global Market, Finstreet Global Clearing and Settlement, and Finstreet Capital. They are now registered to offer various services including digital asset trading and custody, private financing, security token trading, and more, powered by blockchain infrastructure.
Commenting on the licenses, Finstreet’s Thani bin Ahmed Al Zeyoudi called them “a testament to the UAE’s commitment to embracing technological advancement and enabling inclusive global trade.”
The licensing allows the UAE to become a global hub for digital assets and blockchain. In June, the country’s central bank approved dirham-backed stablecoins to limit the influence of U.S. dollar-backed alternatives. Local stablecoins also allow the watchdog to better protect local investors from global contagion events, such as the historic UST stablecoin crash of 2022.
The Middle Eastern nation also clarified that block reward mining was legal, while the central bank continued development of its CBDC.
Finstreet is the latest showcase of the proactive digital asset approach, says ADGM Chairman Ahmed Jasim Al Zaabi.
“This launch not only reinforces our strategic vision of positioning Abu Dhabi at the heart of global finance, but also drives economic growth and improves connectivity in the global market,” he added.
Watch: The Future Has Already Arrived in Nigeria
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