The real estate tokenization market is projected to become a key method of financing and trading property, potentially reaching a value of $4 trillion by 2035, according to a Deloitte report. Current estimates suggest the market is under $300 billion, growing at a compound annual growth rate of 27%. Tokenization, which involves creating digital representations of assets on blockchain, offers significant advantages like operational efficiencies, quicker settlements, and broader access for investors. However, the sector faces challenges, including regulatory clarity, asset custody, and cybersecurity concerns. The report outlines three primary areas of growth: private real estate funds, securitized loan ownership, and under-construction land projects, with tokenized debt securities expected to dominate the market. By 2035, the valuation for tokenized debt securities could reach $2.39 trillion, while private funds and land development assets are expected to contribute significantly as well. As the sector evolves, overcoming the outlined challenges will be crucial for its success.

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