Pakistan’s real estate sector, once considered a pillar of economic stability, is now grappling with a credibility crisis. Widespread fraud, unchecked land mafias, tax evasion and manipulation of property records have all contributed to an environment of mistrust and uncertainty. This erosion of confidence has affected not only domestic stakeholders but also the millions of overseas Pakistanis who have traditionally invested in property as a safe and profitable asset.
In this climate of skepticism, even tangible assets like land and buildings are being avoided, while ironically, intangible digital assets like cryptocurrencies — backed by no physical collateral — continue to attract investment due to their accessibility and perceived transparency. Real estate, despite its immense value, remains largely informal, representing one of the most underutilised economic sectors in terms of transparency, taxation and access.
The root problem lies not in the real estate asset itself, but in how it is managed, documented and transacted. A transformative solution lies in the emerging field of real estate tokenisation through blockchain technology. Tokenisation refers to the digital representation of real-world assets, such as property, by creating divisible digital tokens on a blockchain. Each token represents a fractional ownership stake in the underlying asset. These tokens can be bought, sold and transferred easily, giving investors a legally backed, transparent and secure way to participate in property markets without traditional bureaucratic hurdles. Properly structured tokenised assets, especially when backed by regulated custodians and property registries, can be legally enforceable and transparent to regulators and courts alike.
Unlike cryptocurrency tokens that often have no intrinsic value, tokens representing physical property are backed by tangible assets. This makes them fundamentally more secure and less speculative. While many in Pakistan remain wary of cryptocurrencies due to regulatory uncertainty, tokenised real estate offers a hybrid model: combining digital efficiency with physical security. Through smart contracts — automated digital agreements — these tokens can manage property transfers, rental income distribution and legal compliance without relying on intermediaries.
Every transaction is permanently recorded on a blockchain ledger, making it immutable and publicly verifiable. This technology directly addresses the challenges that have plagued Pakistan’s property sector for decades: fraudulent documentation, unregistered transactions and disputes over ownership.
The Securities and Exchange Commission of Pakistan (SECP) has taken an encouraging step forward by launching a Regulatory Sandbox to allow innovative financial technologies like real estate tokenisation to be tested in a controlled environment.
In 2024, tokenised property investment was included in the sandbox’s second cohort. This framework allows for the creation of legally recognised digital tokens, supported by trust structures or Special Purpose Vehicles (SPVs), while ensuring compliance with existing property and financial regulations. It represents a practical bridge between traditional land ownership and the digital economy.
Around the world, real estate tokenisation is already being implemented successfully. Countries like Switzerland, Germany, the US and the UAE are leading the way, with platforms offering investors the opportunity to own fractional shares in real estate projects through digital tokens. These models not only ensure legal protection but also improve market liquidity, democratise investment and boost public trust. Pakistan stands to gain significantly by learning from these frameworks and localising them to suit its socio-economic and legal realities.
The vision for a tokenised real estate marketplace in Pakistan is not hypothetical. Emerging platforms like Prop Adviser 2.0 are already preparing to offer decentralised property investment opportunities. Such platforms aim to use blockchain, smart contracts and digital wallets to allow global investors — including overseas Pakistanis — to seamlessly invest in vetted real estate projects. This would reduce reliance on brokers and middlemen, eliminate corruption and allow small-scale investors to participate in a market that has historically been accessible only to the wealthy and well-connected.
The journey ahead requires legal clarity, enforcement of smart contract recognition, digitisation of land records and increased public awareness. But the foundation has been laid. Real estate tokenisation offers not only a technological upgrade but also an institutional reform — one that can bring transparency, restore investor confidence and formalise a major segment of Pakistan’s shadow economy. If adopted earnestly, it can play a vital role in reviving the real estate sector and stimulating broader economic growth. The technology is ready. The need is urgent. The question is: will Pakistan seize the moment?
