How real estate tokenization works

The term “tokenized property” shows up in ads, talks and platforms. It suggests you can buy a piece of an apartment in a few clicks, the way you would buy a fraction of a bitcoin. Behind it is a mechanism with several parts, and only one of them is technological.

This article shows how those parts fit together in Brazil, where the real estate registry has its own rules, and what courts and regulators had said on the subject as of October 2026.

What it means to tokenize a property

Tokenization is the process of recording rights to an asset on a programmable platform. The Bank for International Settlements (BIS), the body that brings together central banks, describes the process as recording claims on real or financial assets that exist on a traditional ledger onto a programmable platform (BIS, Annual Economic Report 2025).

The token is the digital unit that circulates on that platform, usually a blockchain. A blockchain is a ledger shared among many computers, in which each new block of transactions links to the previous one, making retroactive changes very difficult. The basics are explained in how the Bitcoin blockchain works.

The CVM (Comissão de Valores Mobiliários, Brazil’s securities regulator) classifies this type of token as an asset-referenced token: one that “represents one or more assets, tangible or intangible.” The same document cites as examples security tokens, stablecoins, NFTs and “other assets that are the object of ‘tokenization’ operations” (CVM, Guidance Opinion 40/2022).

The key word is “represents.” The token points to something that exists off the blockchain. The central question of any tokenization is: what exactly does it represent, and who guarantees that link?

Where ownership of the property actually lies

In Brazil, the answer on property ownership is clear. The Civil Code states that “ownership is transferred between living persons by recording the transfer title at the Real Estate Registry” (Art. 1,245). And it adds: until the title is recorded, “the transferor continues to be regarded as the owner of the property” (Civil Code, Arts. 1,227 and 1,245).

The Public Registries Law organizes this system. The Real Estate Registry is responsible for recording and annotating acts “that create, declare, transfer and extinguish real rights over properties” (Art. 172), and each property has its own matrícula, the registry record that concentrates the property’s history: who the owner is, what mortgages and liens exist, what area it has (Law 6,015/1973).

That is why the rule guiding the rest of this article is simple: a token is not, by itself, the title of ownership of a property in Brazil. It may represent rights linked to the property, but ownership remains with whoever appears on the matrícula. The grounds for this distinction are detailed in token vs. property title: what’s the difference and in does a token represent legal ownership of a property?.

The four layers of a tokenization

A real estate tokenization can be read in layers. Each has its own risks.

1. The property and its identification

It all starts with a property identified without ambiguity. The Public Registries Law created the National Registry Code (CNM, Código Nacional de Matrícula), a “single nationwide numbering of property registry records” (Art. 235-A). On the tax side, Complementary Law 214/2025 lists the Brazilian Real Estate Register (CIB, Cadastro Imobiliário Brasileiro), administered by the Federal Revenue Service, as the register of rural and urban properties (LC 214/2025, Art. 59).

These identifiers matter because a token only makes sense if it is possible to know, without doubt, which asset it refers to, and whether that asset has recorded debts, encumbrances or disputes.

2. The legal structure

This is the decisive layer, and the least visible. The token does not create rights on its own: the contracts and companies behind it do. The CVM notes that, in market practice, a token may represent “rights to remuneration from a venture,” a right to receive payments in structures similar to securitization, or voting rights (CVM, Guidance Opinion 40).

In practical terms, some possible designs are:

• A stake in a company that owns the property. The matrícula is in the name of a company, and the token represents a share of that company or of its results.
• A right to a portion of the income. The token grants a share of the rent or of the profit from a future sale, without any stake in ownership.
• A credit right. The token represents an amount receivable, such as installments on a mortgage or on a sale on credit.

In none of these cases does the token holder appear on the matrícula. They hold a right against a company or against whoever issued the token, and the strength of that right depends on the contracts.

3. The token and the smart contract

In the technology layer, tokens are created by a smart contract, a program that runs on the blockchain and executes rules automatically: how many tokens exist, who can receive them, how payments are distributed. Networks such as Ethereum are frequently used for this.

The smart contract can restrict transfers to pre-approved wallets, for example. But it only executes what was programmed. If the legal contract says one thing and the code does another, the discrepancy will have to be resolved off the blockchain.

4. The platform and custody

Finally, there is the company that runs the platform, registers investors and often holds the tokens on their behalf. This creates a dependency: if the platform stops operating, access to the tokens and to information about the property may be compromised. The difference between leaving assets with third parties and holding them yourself is covered in custodial vs. non-custodial crypto wallets.

A hypothetical example, step by step

To visualize it, consider an illustrative transaction, unrelated to any real company:

1. A company created solely for this purpose buys a commercial building, and the purchase is recorded on the matrícula in the company’s name.
2. The company issues one thousand tokens, each entitling the holder to 0.1% of the building’s net rent.
3. Investors buy the tokens on a platform, and the platform distributes the rent monthly through the smart contract.
4. One investor sells their tokens to another. The transfer happens on the blockchain within minutes, but the building’s matrícula does not change: the owner is still the company.
5. If the building is sold, the sale requires a deed and recording at the registry, like any other.

The example shows the central point: the blockchain records who holds each token. The registry records who owns the property. They are two different records, and only the second has the effect of ownership.

What electronic registration already does

Brazil’s real estate registry is going digital, but along its own path. Law 14,382/2022 created the Electronic Public Registries System (Serp), with goals such as electronic public recording of acts and interconnection between registry offices (Law 14,382/2022). For real estate, there is the Electronic Real Estate Registration System (SREI), implemented and operated by the National Operator of the Electronic Real Estate Registration System (ONR), as recorded in Provision 195/2025 of the National Justice Inspectorate (CNJ, Provision 195/2025).

The channel video accompanying this article, which is in Portuguese, addresses exactly this: according to its description, it shows how the process works between the Notary Office and the Real Estate Registry, why recording is the act that formalizes ownership and how the national integration of registries is modernizing the sector, presented as one of the pillars for future tokenization.

Digitizing the registry is not the same as putting it on a public blockchain. The official system remains under the oversight of the Judiciary.

What the inspectorates and the CNJ have decided

The corregedorias (judicial inspectorates) of the state courts oversee registry offices and issue rules for them. Three of them have addressed tokens.

Rio Grande do Sul. In 2021, Provision 38/2021 allowed deeds exchanging properties for tokens, provided the parties declared that the tokens did not represent rights over the exchanged property itself. On October 24, 2025, the state’s Inspectorate General suspended the effects of that provision pending a decision by the National Council of Justice (CNJ) in Request for Measures 0006613-89.2025.2.00.0000. The decision instructs registrars to give a negative assessment, that is, to reject, titles that link properties to tokens or create “private ownership controls outside SERP” (TJRS, order of October 24, 2025). In other words, the 2021 rule was not revoked, but it has no effect.

São Paulo. Provision CGJ 54/2025, published on January 23, 2026, according to ConJur, prohibits registrars from making any annotation, entry or recording that links the matrícula to a digital token (ConJur, May 2026).

Santa Catarina. In August 2025, the Inspectorate General for Extrajudicial Services amended its Code of Rules to prohibit any act linking the matrícula “to digital tokens, blockchain representations or any other instrument outside the registry” (RIB, August 2025).

At the national level, the ONR proposed to the CNJ that the use of blockchain and of tokens relating to real estate be part of the SREI, operated by the ONR itself, under the rules of the National Inspectorate, according to the draft transcribed in the Rio Grande do Sul order. As of October 8, 2026, our newsroom had not located a published CNJ decision on this request. If you read somewhere that “the CNJ has already regulated real estate tokenization,” ask for the number of the act.

When the CVM comes in

Beyond the registry, there is the capital market. Under Guidance Opinion 40, an asset-referenced token “may or may not be a security,” depending on the “economic substance of the rights conferred on its holders” (CVM, Guidance Opinion 40).

The CVM uses, among other criteria, the concept of a collective investment contract: there is a contribution of money, a contract, a collective nature, an expectation of economic benefit, a result that depends on the efforts of others and a public offering. In the hypothetical example above, the thousand tokens entitling holders to rent tend to have these characteristics. When that happens, the offering must follow CVM rules, which includes registration or an exemption and minimum disclosures to investors.

Why technology alone does not solve it

The Financial Stability Board (FSB), the international body that brings together G20 financial authorities, points out that token holders’ rights against issuers or underlying assets may lack legal clarity and may not be enforceable in some jurisdictions (FSB, October 2024). The blockchain ensures that the token record cannot easily be altered. It does not ensure that the property exists, is free of debts or that the issuing company will honor the contract.

The advantages and limits of this model, such as fractionalization and liquidity, are covered in real estate tokenization: pros and cons. The comparison with traditional Brazilian real estate investment funds (FIIs) is in real estate tokenization vs. FIIs.

Key takeaways

• Real estate tokenization has four layers: the property identified on the matrícula, the legal structure, the token with its smart contract and the platform. The second is what defines what you hold.
• The token records rights on the blockchain. Ownership of the property remains recorded at the registry, and only that record transfers it.
• RS, SP and SC have prohibited linking matrículas to tokens, the CNJ has not yet issued a national rule, and the CVM may treat the token as a security depending on the rights it grants.