Barry Sternlicht Says U.S. Crypto Regulations Are Blocking Starwood’s Real Estate Tokenization Plans

  • Barry Sternlicht says his $125B firm is ready to tokenize real estate, but U.S. regulations are blocking the launch.
  • He believes tokenization is the future of investing, but the law needs to catch up with the technology.

Barry Sternlicht, who was the founder and CEO of Starwood Capital, says his company is ready to tokenize real-world assets, but U.S. regulations are blocking it. His company manages more than $125 billion in assets. He shared his plans on RWA and made comments on the current U.S. rules on crypto at the World Liberty Forum in Florida

What Tokenization means

Tokenization is a process of turning the ownership of physical assets into digital tokens in the blockchain. Instead of buying an entire building, an investor could buy a small portion in a digital share that can be traded more easily. Supporters say tokenization for the large firms could make it easier to raise money and allow small investors to participate. It also reduces the paperwork and improves transparency

Currently, the U.S. has not fully adopted tokenization in real estate. Consulting firm Deloitte estimates that $4 trillion worth of real estate could be tokenized by 2035, and Proppy has also announced a plan to expand its blockchain-based real estate services. In 2024, less than $0.3 trillion of real estate was tokenized, which signals that the market could grow significantly over the next decade

According to Sternlicht, he described tokenization as “fantastic” and said it represents the future of finance. He compared tokenization to artificial intelligence but said it is still at an early stage of development. He said the biggest challenge is the lack of clear U.S. regulation around digital assets and tokenized securities, which creates uncertainty for large financial firms.

Sternlich’s statement shows that the U.S. regulations are the major issue that blocks large firms from entering the real estate tokenization. If the U.S. lawmakers provide clear rules, then tokenized RWA could become a major market in the upcoming years

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