Today, the tokenization of real things is taking off quite quickly in Europe. This includes apartments, cars, restaurants, and various businesses. To put it simply, you convert the rights to an asset into digital “pieces” that can be held, transferred, or traded via blockchain. This allows you to “own” a small share of, say, an apartment for a few dozen euros, rather than millions.
Article content:
- Tokenization and its rules – Germany as an exemplary regulator
- Switzerland as a hub for tokenization in Europe
- Luxembourg – A small country that is pushing forward with tokenization
- Takousko and car tokenization – Experiment or future?
- Spain tokenizes real estate and sets a new trend
- The United Kingdom is working on tokenizing funds
- What can we learn from this example of early tokenization? And what are the risks?
Tokenization and its rules – Germany as an exemplary regulator
It all depends on whether the token is considered a security. If so, it must be regulated. And that is exactly what European countries are currently working on, albeit each in their own way.
In Germany, it works more like this: the state says, “OK, you can do it, but only if there are clear rules.” If a token represents a share or debt, it is subject to financial regulation and supervision by BaFin. In practice, companies today set up SPVs and link tokens to real legal claims. This gives investors the certainty that they are holding something real, not just hot air. It is robust, but sometimes quite paper-intensive. So Germany is moving forward, but wants to keep things under control.
Switzerland as a hub for tokenization in Europe
Switzerland took a different approach and put together one of the cleanest legal frameworks in the world. Their DLT Act of 2021 allows tokenized securities to have full legal status. FINMA is opening up licensed marketplaces for this. This means that when someone tokenizes a company or real estate there, you can trade that token in an environment reminiscent of a traditional stock exchange, only digitally. Thanks to this infrastructure, Switzerland is becoming a hub where projects go when they want clarity.
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Luxembourg – A small country that is pushing forward with tokenization
Luxembourg is a small country, but it has a really big influence in this field today. In December 2024, they passed Blockchain Law IV. It specifies how tokenized securities can be issued and how blockchain can function as an official registry. This is extremely important. Funds that want to tokenize buildings, hotels, or anything more complex now have a legally secure environment. That is why so many companies raise capital there through tokenized SPVs. It sounds dry, but in practice it is a very important thing.
Takousko and car tokenization – Experiment or future?
In Austria, there is a nice example of mobility. Vienna’s Eloop has tokenized part of its electric car fleet. Today, there are 23 Teslas running in it. They are divided into tokens, and investors receive a share of the profits. It’s an interesting model. You can buy a piece of a car-sharing car that someone else is actually using. However, the project must comply with regulations. Token transfers are not completely free and are subject to KYC/AML. Still, it’s a great example of how tokenization can work in everyday life.
Spain tokenizes real estate and sets a new trend
In Spain, the tokenization of apartments and houses has taken off in a big way. The Reental platform has taken on dozens of projects in recent years. According to available figures, it already has over €30 million in tokenized real estate. It is the first European example of mass tokenization of real estate for ordinary people. Investments there are made in smaller amounts, the process is simple, and it has a “startup” feel to it. It is definitely no longer just an experiment. Thanks to this, Spain is growing and setting a new trend.
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The United Kingdom is working on tokenizing funds
In the United Kingdom, the focus is now less on tokenizing individual apartments or cars and more on funds. The FCA regulator is working on rules for tokenized funds. These will issue their shares as blockchain tokens. When it launches in full, it could be a huge step for the entire sector, as the fund market there is huge. It is still in the consultation phase, but the direction is clear. Tokenization will be allowed, but in a way that is compatible with the existing infrastructure.
What can we learn from this example of early tokenization? And what are the risks?
Looking at the numbers, tokenization is still a relatively small market today, but it is no longer science fiction. Estimates indicate that real estate tokenization in Europe was around $1.23 billion in 2024. This is small compared to the traditional real estate market, but it shows that it is already happening. Longer-term projections, such as those from Standard Chartered, speak of up to $30 trillion over the next ten years. It sounds almost unbelievable, but it is presented as a positive growth scenario, not as a certainty.
However, there are clear risks. The token must be saleable, otherwise it loses its meaning. Legislation must be robust, otherwise investors will face problems in insolvency proceedings. Who holds the tokens (custody) and what happens if the intermediary goes bankrupt are among the most frequently asked questions today. That is why some projects are heading to Luxembourg or Switzerland, where there is greater legal clarity. Hopefully, this will become clearer elsewhere in the coming years.
Overall, tokenization in Europe today looks like it is no longer just a startup idea. Germany has rules, Switzerland has infrastructure, Luxembourg has legal certainty, Austria has functional pilots, Spain has commercial platforms, and the UK is working on fund tokenization. The market is not huge yet, but each country is finding its own way. Together, this is beginning to form a European ecosystem that could become a natural part of investing within a few years.
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