Token and property title: what is the difference

A purchase and sale deed and a token on a blockchain have something in common: both are records of information. That is why it is easy to think one could replace the other. That is not the case, at least under current Brazilian law.

This article compares the two concepts. It shows what a property title is, what a token is, what each record guarantees and how market structures usually link tokens to real estate. The direct legal question, whether a token can be ownership of a property, is covered in does a token represent legal ownership of a property?. Here, the focus is on understanding the difference in nature between the two things.

The interpretations of rules below are the editorial team’s readings. For a specific case, consult a lawyer.

Two types of record

A public registry is an official book kept by an agent of the state or by someone the state delegates, with rules defined by law. For real estate, it is the Registro de Imóveis (Property Registry), where each property has a matrícula: the registration record that brings together its description, its owners over time and the encumbrances on it, such as mortgages and liens.

A distributed ledger is a record kept by a network of computers, in which each participant holds a copy and the update rules are in the software itself. Blockchain is the best-known type. The CVM (Brazil’s securities regulator) describes crypto-assets as digitally represented assets, protected by cryptography and recorded through these technologies, and says they are “usually” represented by tokens, which it calls “intangible digital securities” (CVM Guidance Opinion 40/2022). To see how a blockchain works inside, see how the Bitcoin blockchain works.

The essential difference is not technical, it is legal. The property record has an effect defined by law. The ledger of a private or public network has whatever effect contracts and the law give it, and in the case of real estate ownership the law does not give it that effect.

What a property title is

In everyday language, “property title” usually means the deed. Technically, the title is the document that formalizes the transaction, such as the public deed of purchase and sale. It is not enough to transfer the property.

The Civil Code, in art. 1,245, says that ownership is transferred between living persons “through the registration of the conveyance title at the Property Registry”. Until the title is registered, the seller is still considered the owner. Art. 1,247 provides that, if the registration does not reflect the truth, the interested party may request its correction or annulment.

The Public Registries Law completes the picture. Art. 176 requires each property to have its own registration record. Art. 252 says that the registration, as long as it is not cancelled, produces all legal effects.

In short: the title is the document of the transaction; registration on the property record is what confers ownership.

What a token is

A token is a unit recorded on a distributed ledger, associated with an address, the digital wallet. Whoever holds the private key to that address can transfer the token to another address. The network records the transfer.

What the token proves, on its own, is limited: that a certain address controls a certain digital unit at a certain moment. The meaning of that unit, what it entitles the holder to receive or demand, comes from outside the network: from a contract, an offering’s terms, a law.

Brazilian law recognizes this distinction. Law 14,478/2022, which deals with virtual asset service providers, defines a virtual asset as “the digital representation of value” that can be traded or transferred by electronic means. It excludes from this category representations of assets whose issuance, bookkeeping, trading or settlement is already provided for in law or regulation, such as securities. In the editorial team’s reading, the law treats the token as a form of representation; what determines the legal nature is what is being represented.

What each record guarantees

The table summarizes the comparison, in the editorial team’s reading of the rules cited.

Aspect	Property record at the Property Registry	Token on a blockchain
Who keeps it	A registrar, under the oversight of the Judiciary	A network of computers, according to the software’s rules
What it proves	Who the owner is and what encumbrances exist on the property	Which address controls a certain digital unit
Effect on the property	Transfers ownership (Civil Code, art. 1,245)	None on its own; depends on the contract that gives it meaning
Value against third parties	Enforceable against everyone until cancelled (Law 6,015, art. 252)	Valid between the parties to the extent of the contract
Correcting errors	Correction or annulment through legal means (art. 1,247)	As a rule, transfers are not reversed by the network itself
Loss of access	The owner remains the owner; can request certificates	Whoever loses the private key may lose control of the token

The last row deserves attention. With the property record, losing a piece of paper does not change who the owner is. With a token, losing the key can mean losing access to the digital asset, even though the underlying right might eventually be claimed from the issuer by other means. On this kind of risk, see how to protect a wallet’s seed phrase.

The link with the physical world

A blockchain does not know what happens outside it. If the property is sold, seized or demolished, the network does not change by itself. Someone has to ensure that the token and reality remain consistent, and that someone is a person or company, not the code.

That is why the justice inspectorates have been firm. When it suspended, in 2025, the state’s 2021 rule that allowed exchanges with tokens, the General Justice Inspectorate of Rio Grande do Sul stated that “no private structure may function as a parallel real estate registry system”, according to Registro de Imóveis do Brasil. The inspectorates of São Paulo and Mato Grosso do Sul barred acts that link property records to tokens or digital assets, until the CNJ (National Council of Justice) regulates the subject or federal law changes, according to IRIB.

There is also the question of identifying the asset. The video on this page, a clip from the Token & Tech channel (in Portuguese), presents the Brazilian Real Estate Register (CIB, Cadastro Imobiliário Brasileiro), described as a kind of “taxpayer ID for the property”, and the National Registration Code (CNM, Código Nacional de Matrícula), which standardizes registry identification. The video’s point is direct: to represent a property digitally, you first need to know exactly which property is being represented.

How tokens are usually linked to real estate

Since the token cannot be ownership, market structures make it mirror another right, which relates to the property indirectly. Three models are common.

Quotas in an SPE. A special purpose company (SPE, sociedade de propósito específico) is a company created for a single venture. It is the registered owner of the property on the property record. The token represents a stake in that company. Note one detail: under the Civil Code, the assignment of quotas in a limited liability company only takes effect against the company and third parties once the instrument is registered (art. 1,057, sole paragraph). In the editorial team’s reading, the token on its own does not replace that corporate registration either. And you come to depend on the SPE’s management and financial health.

Receivables. A company assigns the right to receive installments from sales or rents, and the token gives the right to a share of that flow. Circular Letter 4/2023/CVM/SSE says these “receivables tokens” or “fixed income tokens” are probably securities and that certain offerings may use the crowdfunding regime of CVM Resolution 88/2022. The main risk is credit risk: if the debtors do not pay, the flow shrinks.

Investment contract. The token gives the right to a share of the results of a venture run by third parties. CVM Opinion 40 uses criteria such as investment, collective nature and expectation of return from the efforts of others to decide whether this is a security, and states that the use of blockchain is irrelevant to this classification.

In all models, the right question is the same: what right does the token represent, against whom, and where is that right documented.

Why the distinction matters to you

Anyone who buys a token thinking they bought a fraction of a property may be surprised in three situations: when they want to sell, when the issuing company runs into trouble and when a dispute arises over the property. At those moments, what counts is the property record and the contracts, not the balance in the wallet.

This does not mean every tokenized real estate product is invalid. It means the token’s value depends on a right that exists outside it and on who is responsible for that right. That right can be lost entirely if the structure fails.

Key takeaways

The property title is the document of the transaction, and ownership of the property is only transferred when that title is registered on the property record. A token is a digital record that proves control of a unit on a network, and its legal meaning comes from external contracts and rules.

When a token appears linked to a property, it almost always mirrors another right: quotas in an SPE, receivables or an investment contract. Understanding what that right is, who guarantees it and which rule applies is what separates an informed decision from a shot in the dark.