Blockchain Technology for Real Estate Transactions in Sweden
Blockchain technology (as used by Bitcoin) is a future technology that is likely to become a key infrastructure in an increasingly digital world. The possibilities of using Blockchain technology for real estate transactions has been jointly investigated by the Swedish Land Registry, ChromaWay (a blockchain company), Telia (telecommunication services) and Kairos Future (a consulting firm). They explain that the objective is “to shorten lead times, increase security, and create customer value for the users of the services of the Land Registry.”
The Swedish Land Registry (Lantmäteriet) performs property registrations and provides information about Sweden’s 3.2 million properties. A real estate transaction in Sweden requires the signing of several physical documents (such as contract, bill of sale, credit documents). The documents are normally sent back and forth with mail (in some instances a scanned copy might suffice). This process normally takes several weeks to perform and could potentially be replaced by the near instantaneous usage of Blockchain technology.
The blockchain can regulate and control the workflow and digital signage. The blockchain verifies the correctness of the document and the rules and order of authorization with a technology for storing digital fingerprints. The fingerprints are unique for every document, register and process step, hence become a verification similar to a human fingerprint.
A white paper, together with a technical demo, displays a proof of concept for the implementation of the Blockchain technology for real estate transactions. The demo displays the five actors (buyer, seller, broker, the Swedish Land Registry and the bank) each interacting with the process of a real estate transaction. All actors will see the same information, and have proof of all steps taken. A process that would normally drag out several weeks (sending documents back and forth between the five actors involved) can now be completed almost directly.
With this technology we will establish ourselves as a model even on an international arena. We already have a project in Georgia where we have aided them in strengthening the processes and establishing a technical solution for property registration. Now they are, just like us, looking at the blockchain as a technical solution.
– Mats Snäll, head of development Real estate registration, Swedish Land Registry
The first step in the project is finished with a promising outcome. The next step of the project would be further development of the technology in a test environment, with real estate agents and banks involved. To the next step ‘Landshypotek’ bank has decided to be a partner.
Similar attempts with new technology to implement “smart contracts” can also be seen in other countries. Estonia has e-residency to sign contracts, verify signings, start companies etc. Bitland will start implementing land registration using bitcoin technology in Ghana where 78% of land is unregistered.
Image: Cropped and titled image from Chromaway press kit.