The next frontier of digital assets is not speculation, it is shelter. As tokenised real estate and blockchain-recorded titles move from concept to compliance, the same principles that once secured digital money must now protect physical property. Yet the bridge between code and concrete cannot stand without a third pillar: insurance. Without it, tokenised property remains a novelty; with it, it becomes a tradable, financeable and legally enforceable class of wealth.
From inheritance to ownership
In our last article, Lost Keys, Lost Fortunes, we explored how unprotected digital assets vanish when cryptographic access dies with their owners. The next crisis may not be loss through death, but loss through uncertainty - what happens when the home you live in, or invest in, exists simultaneously on a county deed book in the US or the land registry in the UK and a distributed ledger? Tokenised property offers the promise of global liquidity: a home, office building or shopping centre, i.e. any type of real estate can be fractionalised into digital shares and traded in real time. But such power invites questions that mirror those of digital inheritance: Who truly owns the token? What happens when the blockchain record and the recorded title diverge? Who insures the risk when code and law disagree?
Top ten global tokenised real estate platforms
Company
Website
Tokenised Real-Estate / RWA Value*
1
RealT
~US$150 million (U.S. rental properties)
2
Lofty
~US$50 million (150+ properties)
3
Propy Inc.
Facilitated ~US$4 billion in transactions including tokenised property
4
tZERO
~US$200 million in CRE tokenisation via Reg D offerings
5
HoneyBricks
~US$180 million in multifamily deals
6
RealBlocks
Claims ~$77 billion AUA via digital funds (not all pure real estate)
7
DigiShares
~$1 billion processed in securities (including real estate)
8
Zoniqx
>US$100 million tokenised via partnership with StegX
9
StegX Finance
>US$100 million compliant tokenised real estate
10
BrickMark
~US$134 million Zürich property tokenised item
Source: zoniqx.com
History of insurance in expanding property markets
Insurance has long been the hidden architecture behind every major expansion of property ownership. In the 18th and 19th centuries, fire insurance and marine insurance allowed merchants and homeowners to invest in fixed assets without fear that one disaster could wipe out an entire fortune. The creation of mortgage insurance in the early 20th century, later institutionalised in the US through the Federal Housing Administration (FHA) in 1934, made it possible for banks to extend long-term, low-down-payment loans to ordinary Americans. Interestingly, in the UK it was not until 2004 that mortgages became regulated. By transferring risk from the individual to the collective pool, insurance transformed the home from an elite asset into the foundation of the modern middle class. In the post-war years, this structure enabled the suburban boom: developers could finance massive housing tracts because insurers guaranteed mortgages, builders and titles. Each innovation in real-estate finance, from securitised mortgages to homeowner associations, relied on corresponding innovations in risk transfer. Insurance thus became the trust mechanism that allowed markets to grow faster than personal trust could scale. It did for property what the FDIC, in the US, did for banking: it replaced personal confidence with systemic assurance. The same pattern is now emerging in the digital age. Blockchain technology has created a new property system without borders, but also without built-in safety nets. As the 20th century’s insurance infrastructure enabled suburban growth, the 21st century’s insurance infrastructure will enable tokenised ownership, transforming cryptographic code into legally recognised, tradable value.
Title insurance for the token age
Traditional title insurance protects buyers and lenders from defects in the chain of ownership. The same concept will need to evolve into on-chain title insurance, a policy that guarantees that the blockchain representation of property corresponds exactly to the legal record. Future title insurers will likely underwrite:
· the accuracy of token-to-deed mapping
· the authenticity of smart contracts transferring fractional interests, and
· the validity of automated escrow and lien releases coded into the ledger
In essence, insurance will certify that the blockchain’s promise of “immutability” matches the real-world reality of ownership.
Smart contracts, real coverage
Insurance itself is becoming programmable. “Parametric” policies, smart contracts that pay automatically when predefined conditions are met, could protect tokenised property from fire, flood or market collapse. Imagine a tokenised real estate portfolio: if satellite data detects a wildfire perimeter breaching its insured zone, a blockchain oracle triggers instant payment to all token holders, without claims adjusters or delay. Risk management becomes transparent, automatic and global.
Investor protection and custodial risk
The same self-custody risk that plagued early crypto investors will reappear in real-estate tokenisation. A lost private key could mean loss of a multimillion-dollar property share. Komainu is an example of a company already experimenting with custodial loss coverage, policies that reimburse investors for verified digital key compromise or platform failure. Institutional participation will depend on these assurances. Pension funds and Real Estate Investment Trusts (REITs) cannot enter a market where a single misplaced credential can erase an investment. Insurance thus becomes the institutional bridge between blockchain efficiency and fiduciary duty.
Custody of tokenised real estate raises an important question as, historically, the deeds/titles for the real estate you own are either held by your lawyer or yourself. Self-custody of tokenised real estate gives investors direct ownership and control over their assets, removing reliance on intermediaries such as custodians or exchanges. In traditional finance, custodians look after over $312trillion of assets holding securities on behalf of clients, creating counterparty and operational risk, if the custodian fails, access to assets may be lost or frozen. With blockchain-based tokenisation, investors can hold property tokens directly in digital wallets secured by private keys, ensuring 24/7 access, transparent on-chain proof of ownership and faster peer-to-peer transfers without settlement delays. Self-custody also supports fractional ownership and global liquidity, allowing investors to trade or collateralise assets instantly. Moreover, it aligns with the decentralised ethos of blockchain, reducing costs, regulatory friction and dependence on centralised institutions. Whilst it requires robust key management and personal responsibility, advances in multi-signature wallets and smart-contract insurance make self-custody an increasingly secure, efficient and autonomous model for managing tokenised real estate portfolios. According to Savills, the global real estate market is worth over $393 trillion - i.e. more than the assets global custodians currently ‘safeguard’ If traditional custodians can oversee tokenised property assets, they could double the $44billion of revenue they currently earn from custody services - or face increasing competition as owners start to self-custody their digital assets…..
Mortgage insurance and blockchain credit markets
Insurance will also unlock on-chain mortgage finance. Smart-contract-based lending against tokenised property will require the same safety nets that fuelled 20th-century homeownership:
· credit default insurance - protecting lenders from borrower default
· valuation assurance - using oracles and insured appraisals to prevent manipulation
· liquidity insurance - guaranteeing redemption value in case of platform failure
These layers replicate the security architecture of the Federal Housing Association and Fannie Mae in the US and the mortgage infrastructure banks and building societies in the UK, only, this time, the underwriting data, loan performance and claim triggers live directly on the blockchain.
The compliance catalyst
Tokenisation of real property will force a merger between real-estate law, insurance regulation and blockchain code. Expect to see:· licensed insurers acting as validation oracles
· blockchain registries integrating with state recorder systems, and
· policy conditions encoded into the same smart contracts that record ownership
When these systems converge, property will not just be insured, it will be self-auditing, with compliance embedded into every transaction.
From code to confidence
Without insurance, tokenised property remains a speculative instrument. With it, homes become programmable, insurable and transferable across borders. The same logic that made 30-year mortgages possible in the 20th century will make 30-millisecond property trades possible in the 21st. As digital inheritance law matures and tokenisation expands, the convergence of law, code and insurance may do for property ownership what FDIC insurance once did for banking - transform risk into confidence and confidence into growth.
Reid Winthrop is an attorney at Winthrop Law Group, PC in Newport Beach, California, where he advises clients on business and technology matters, including digital asset regulation and insurance issues. Mr. Winthrop also serves as General Counsel for property tokenisation company, NiftyOne, Inc.
This article first appeared in Digital Bytes (25th of November , 2025), a weekly newsletter by Jonny Fry of Team Blockchain.