HK fintech firm to turn real estate into NFTs after Thai license grant

The Thailand subsidiary of fintech startup Fraction has been awarded an initial coin offering portal license by the country’s Securities and Exchange Commission.

Fraction’s co-founders: Shaun Sales (left), who also serves as chief technology officer, and Eka Nirapathpongporn, the startup’s CEO / Photo credit: Fraction

With the license, the Hong Kong-based company can now link offline assets like real estate to non-fungible tokens (NFTs), digitize them, and offer a fraction of them to interested parties.

“We fractionalize the ownership of these NFTs, and these ownership tokens are offered to investors. Therefore, it is an asset-backed ownership token,” explained co-founder and CEO Eka Nirapathpongporn in an interview with Tech in Asia.

Fraction mints an NFT that has a “real-world legal link” to a property, he added. This token would comprise different fungible tokens, or fractions, with each one representing a portion of the property.

Photo credit: Fraction

These tokens can then be listed through what the company calls an “initial fraction offering (IFO),” with ownership of a fraction equivalent to ownership of a portion of the actual real estate asset. Fractions can then be traded among investors.

“Now you can […] legally own a part of this villa – maybe 1% of it – rather than having to fork out US$5 million to buy the whole thing,” added Nirapathpongporn. He also noted that Fraction makes real estate investment accessible with a minimum capital of around US$150.

The firm has already signed a memorandum of agreement with various development firms in Thailand, such as Magnolia Quality Development, Charn Issara Development, and Nirvana Daii. Fraction is eyeing IFOs of the three developers’ real estate projects, with a total value of around US$462 million.