Tokenised Real Estate in Switzerland: How DLT Is Reshaping Property Investment

From Brick to Bit: The Tokenisation Proposition

The idea is straightforward in concept and considerably more complex in execution: take a real property asset, divide ownership of it into digital tokens recorded on a distributed ledger, and allow investors to purchase fractional interests at sizes previously impossible. Where buying into a CHF 20 million Zug commercial building once required institutional capital, tokenisation — in theory — opens that investment to a participant with CHF 10,000 to deploy.

Switzerland has positioned itself at the forefront of regulatory frameworks designed to make this viable. The Federal Act on the Adaptation of Federal Law to Developments in Distributed Ledger Technology — the Swiss DLT Act — came into force in stages from 2021, creating a legal foundation for ledger-based securities that has no direct equivalent in most European jurisdictions. The implications for real estate investment are substantial, though the market remains at an early stage of development and significant challenges persist.

What Tokenisation of Real Estate Means

At its most basic, tokenising a real estate asset means representing an ownership or economic interest in that property as a digital token on a blockchain or other distributed ledger. Each token confers on its holder a defined set of rights — typically economic rights (a proportionate share of rental income and capital appreciation) and sometimes governance rights (voting at investor meetings).

The token itself is not the property, of course. The underlying legal architecture almost invariably involves an intermediary structure. In the Swiss context, this is typically a special purpose vehicle (SPV) — an Aktiengesellschaft or GmbH — that holds the physical property. The tokens represent interests in that SPV, or in a ledger-based security issued by it. The tokenisation layer provides the mechanism for fractional transfer and secondary market trading; the SPV provides the legal ownership vehicle and the entity through which rent is collected and expenses paid.

This distinction matters enormously for regulatory and tax purposes, and is the source of several of the complexities discussed below.

The Swiss DLT Act: Enabling Infrastructure

Prior to the DLT Act, Swiss financial law provided no specific recognition for ledger-based securities as distinct legal instruments. Existing concepts — certificated securities, uncertificated securities, book-entry securities — did not map cleanly onto token structures, creating legal uncertainty that deterred serious institutional use of tokenisation.

The DLT Act addressed this by introducing the concept of the Registerwertrecht (ledger-based right), a new category of uncertificated security that exists exclusively on a distributed ledger and whose transfer is legally effective through the ledger mechanism itself, without requiring further contractual assignment. This is legally significant: it means a token transfer on a compliant distributed ledger is, in Swiss law, a legally effective transfer of the underlying right.

For real estate tokenisation, this enables the issuance of tokens that represent interests in SPVs or in mortgage-secured instruments with a legal certainty that was previously unavailable. FINMA has engaged with the DLT Act framework and recognises ledger-based securities as financial instruments subject to the applicable regulatory regime — meaning that a token representing a share in a real estate SPV is regulated in the same manner as the underlying economic interest it represents.

Existing Swiss Tokenised Real Estate Platforms

The Swiss tokenised real estate market includes several active participants, though the sector remains nascent by comparison with traditional real estate fund markets.

BrickMark is among the most prominent Swiss-based tokenised real estate ventures. The company has structured acquisitions of commercial real estate — including a notable transaction on Bahnhofstrasse in Zurich — using a token-based investment structure, with tokens listed on regulated exchanges. The Bahnhofstrasse transaction attracted attention as a proof-of-concept for high-value tokenised commercial real estate investment.

Stableton operates as a platform offering access to alternative assets including real estate through tokenised structures, focusing on enabling access for investors who would not traditionally meet the minimum investment thresholds of institutional real estate funds.

Swiss Real Coin and several smaller platforms have also tested the market with tokenised structures backed by Swiss residential and commercial properties. The SIX Digital Exchange (SDX), the blockchain arm of the Swiss stock exchange operator, provides a regulated infrastructure layer on which tokenised securities — including real estate-backed instruments — can be issued and traded under FINMA oversight.

How a Tokenised Property Deal Is Structured

A typical Swiss tokenised real estate transaction follows a sequence that begins with asset selection and ends with token distribution to investors.

The property owner or promoter first establishes an SPV to hold the target property. Legal counsel conducts due diligence on title, encumbrances, and planning status — the same exercise as in any commercial property acquisition. A tokenisation platform or technology provider then works with the SPV to design the token structure: how many tokens, what economic rights attach, what governance rights (if any) are included, and on which ledger the tokens will be issued.

A smart contract audit is conducted to verify that the token contract code accurately reflects the intended legal arrangements — a step that has caught errors in several early-stage tokenisation projects globally. Investor onboarding involves KYC/AML checks that are, if anything, more rigorous than those applied to traditional fund subscriptions, because the regulator requires the same standards regardless of the distribution mechanism.

Token issuance is then completed, and investors receive tokens in their digital wallets proportionate to their investment. Rental income is typically distributed via the smart contract on a periodic basis, with the SPV collecting rent and converting it into distributions processed through the token mechanism.

Benefits of the Tokenisation Model

The theoretical benefits of real estate tokenisation are well-established in the literature. Liquidity enhancement is the most frequently cited: whereas a traditional real estate fund investment in Switzerland may involve a notice period of months for redemption, a tokenised interest can in principle be transferred on a secondary market in near-real time. The practical reality of secondary market liquidity is discussed below.

Fractional access is the second major benefit. A CHF 50 million logistics facility in the Zug corridor could, via tokenisation, be made accessible to an investor with CHF 5,000 — a democratisation of access that is genuinely significant even if the secondary market challenges temper the enthusiasm.

Geographic reach is a related advantage: tokenised Swiss real estate can be marketed to investors in Singapore, Dubai, or New York without the logistical friction of traditional Swiss real estate fund subscriptions, subject to each jurisdiction’s securities regulations.

Transparency is a structural feature of distributed ledger systems: all token holders can verify ownership records and transaction histories on-chain, subject to the design of the particular ledger.

Challenges: Lex Koller, Liquidity and Regulatory Complexity

The benefits are genuine but incomplete without a clear-eyed examination of the challenges.

Lex Koller is the most fundamental constraint specific to Switzerland. The Federal Act on the Acquisition of Real Estate by Foreign Persons applies to token holders in precisely the same manner as it applies to direct property buyers. A foreign investor — any person without Swiss citizenship or C-permit — who acquires tokens representing an interest in a Swiss residential property is, in law, acquiring a restricted form of Swiss residential real estate and requires a Lex Koller permit, which in practice is almost never granted. This restriction applies regardless of the fractional nature of the interest or the digital form of the token.

For commercial real estate, the position is more nuanced: Lex Koller generally does not apply to commercial property, meaning tokenised commercial real estate can be marketed globally (subject to securities law compliance in target jurisdictions). This distinction is not always clearly communicated by early-stage platforms, creating regulatory risk for investors who do not conduct adequate due diligence.

Secondary market liquidity remains thin in practice. While the infrastructure for 24/7 trading exists, the actual secondary market for Swiss tokenised real estate instruments is characterised by limited daily volume, wide bid-ask spreads, and a small pool of market participants. Investors should not assume that the theoretical liquidity of tokenised assets translates into the practical ability to exit a position quickly at a fair price.

Regulatory complexity and cost is a further challenge. Structuring a compliant tokenised real estate product in Switzerland — SPV establishment, token legal opinions, smart contract audit, FINMA registration if required, prospectus preparation, AML compliance systems — is expensive. These costs are amortised over the deal size and reduce the economics of smaller tokenisation transactions.

Institutional Interest

Institutional interest in Swiss tokenised real estate has grown, though primarily in the form of exploratory engagement rather than large-scale deployment of capital. Swiss pension funds face regulatory constraints on the types of instruments they may hold, and a novel tokenised structure requires explicit legal analysis before a Pensionskasse compliance committee will approve an allocation. The SDX platform’s regulatory legitimacy has been a positive signal: if a FINMA-supervised exchange provides the trading infrastructure, the institutional risk framework becomes more tractable.

Swiss and international private banks have begun including tokenised real estate in the alternative investment offerings they present to ultra-high-net-worth clients. Julius Baer, Vontobel, and others have engaged with blockchain-based securities issuance, creating a distribution pathway for tokenised real estate products that leverages existing client relationships.

Comparative Jurisdictions: Luxembourg and the UAE

Luxembourg has developed a competing framework through its RAIF (Reserved Alternative Investment Fund) structure and its blockchain-friendly legislative updates, and has attracted several tokenised real estate structuring exercises given its status as Europe’s pre-eminent fund domicile. The Luxembourg approach tends to sit within the AIFMD framework, providing EU distribution passporting that Swiss structures cannot access.

The UAE — particularly Dubai — has attracted attention for tokenised real estate given the Real Estate Regulatory Agency’s (RERA) experiments with property tokenisation and Dubai Land Department’s digital registry initiatives. The UAE’s approach benefits from a simpler Lex Koller equivalent (no such restriction in the UAE) and a government-led promotional posture, but the legal framework is less mature than Switzerland’s.

Switzerland’s advantage is the DLT Act’s conceptual clarity and FINMA’s engagement, combined with Zug’s position as the global crypto hub — a self-reinforcing ecosystem for digital asset innovation.

2026–2028 Market Forecast

The trajectory is clear: tokenised real estate in Switzerland is not a speculative concept but an emerging institutional-grade market segment. The DLT Act provides the legal foundation, FINMA has provided regulatory clarity, and the infrastructure — SDX, established law firms with specialist DLT practice groups, smart contract auditors — is in place. The constraints are practical rather than structural: secondary market depth will grow with the asset base, and the Lex Koller restriction will continue to limit residential tokenisation to the domestic and permanent-resident market. The commercial tokenised real estate market, unconstrained by Lex Koller, is the sector most likely to see material institutional adoption between now and 2028.

Donovan Vanderbilt is a contributing editor at ZUG ESTATES, a publication of The Vanderbilt Portfolio AG, Zurich. The information presented is for educational purposes and does not constitute investment advice.