Anetta Proskurovska

We examine the implications of tokenization for the transformation of things into financial assets. Framed as the ‘democratization’ of financial investment by its advocates, tokenization is a process whereby asset ownership is fractionalized and represented by a digital token to be sold to potential investors on blockchain-based platforms. Tokenization can be seen as an extension of securitization to illiquid real-world assets or digital assets; as such, tokenization is often framed as a technique to isolate risks, reduce financing costs, and generate returns without selling the underlying assets. For example, real estate security tokens offer fractionalized ownership to smaller investors through digital means lowering entry barriers, though such investors still typically lack exposure to diversified real estate token portfolios. Through an analytical and empirical investigation, we argue the governance claims made about tokenization obscure a key contradiction: tokenization is touted as a way to democratize financial markets, but the necessary adaptation of tokenization to prevailing financial market infrastructures undermines this democratization promise. Engaging with this contradiction, we unpack the governance of financial markets and assets through the techno-financial transformation of things into digital tokens, focusing on the promise of tokenization to democratize finance.

This paper investigates how blockchain technology may alter the defining mechanisms of residential real estate transactions in Sweden. It departs from the assumption that blockchain applications do not merely change complex socio-economic, organisational and governance arrangements of mature housing and mortgage markets. Rather, they may trigger resistance among incumbents in the current organisational model, which will drive incremental change. This analysis shows that housing transactions in Sweden are long and complex endeavours, underpinned by exclusivity, uncertainty and information inequalities. A public-private consortium led by Lantmäteriet – a Swedish government agency – has pioneered the use of blockchain technology for the conveyance of a house to address these deficiencies. This project has not moved beyond the proof-of-concept phase, while the socio-technical organisation of transactions has evolved. Insights from institutional and evolutionary approaches help conceptualise how technologically induced and qualitatively different structures and functional effects may change the way housing and mortgage markets will work, thereby highlighting both disruptive potentialities and limitations of blockchain applications for the legacy design underpinning the current Swedish housing transaction system. Following a forensic empirical approach, this paper dissects the organisational architecture, key practices and the linked network of actor groups running Sweden's property and mortgage markets. Results illustrate that understanding concrete blockchain-induced changes and their unintended consequences requires closer scholarly attention at the scale of actor networks, the types of knowledge and technologies, and the micro-geographies in which they are embedded. Such in-depth understanding enables better-informed assessments of the blockchain challenge for complex housing and mortgage markets.