Kunal Bhasin, a digital asset co-lead at KPMG Canada, believes institutional investors will soon flock to blockchain-tokenized high-value commercial real estate shares.

Speaking at the Toronto Collision Conference, Bhasin told Cointelegraph that Tokenization could disrupt the traditional ownership structure of significant commercial buildings. Historically, only deep-pocketed real estate and pension fund managers could afford to invest in these properties.

A Slice of the Big Pie

Bhasin envisions a future where institutional investors, including family offices, can own a slice of significant commercial buildings like Toronto's Eaton Center.

'Tokenization of commercial real estate can enable that,' he said. This could become one of the crypto industry's most significant institutional use cases.

However, Bhasin noted that many of these 'institutional DeFi' players would prefer to transact in a more permissioned environment. They recognize decentralized financial technology's efficiency but want to know the participants they are interacting with.

The Role of Compliance

Bhasin explained that know-your-client (KYC) checks would be an essential part of this process. The slow adoption of tokenized real estate is already underway.

For example, Bitfinex Securities facilitated a tokenized asset raise in April for investment in a 4,500-square-foot Hampton by Hilton hotel at El Salvador's international airport, although it has only raised $342,000 of its $6.25 million goal.

Expanding Use Cases

Tokenized Treasury and money market funds are other bullish use cases Bhasin expects to see more of shortly. He pointed to the relative success of the BlackRock USD Institutional Digital Liquidity Fund (BUDIL), which has amassed $462.7 million in value since its launch in March, according to data compiled by 21Shares.

Overcoming Reputational Risks

Despite the promising outlook, asset management firms and banks remain wary of becoming more active in crypto due to the spate of frauds and scams.

The 'reputational risk' still lingers, but there has been recent progress. Bhasin mentioned that KPMG leverages infrastructure from blockchain analytics firm Chainalysis to identify potential illicit activities that may be tied to its client base.

' There is fraud in every industry,' he said. Still, banks would be more likely to work with industry players, implementing the necessary infrastructure and best practices to identify illicit activities.

Bhasin concluded by emphasizing the urgency for institutions to get involved in crypto and digital assets. ' Soon, not being involved in crypto and digital assets is going to be a career risk,' he said. 'If you are not offering it today, your competitors are -- and they are getting that advantage over you.'