Kenya’s Real Estate on Blockchain: OwnMali Joins CMA Kenya Regulatory Sandbox
The Capital Markets Authority of Kenya (CMA Kenya) has recently welcomed Infiniti n Beyond Limited into its Regulatory Sandbox to trial OwnMali, a pioneering blockchain-powered real estate tokenization platform. This move marks a significant step in integrating blockchain technology into the Kenyan real estate sector.
What is OwnMali?
OwnMali aims to democratize property ownership by allowing individuals to invest in high-quality real estate for as little as KES 200 (about $1.5). The platform achieves this by tokenizing properties into small digital tokens, enabling users to co-invest and co-own properties with others. This innovative approach opens up real estate investment to a broader audience, traditionally excluded from the market due to high entry costs.
Regulatory Sandbox Objectives
During its 12-month tenure in the regulatory sandbox, OwnMali will adhere to several stringent requirements:
- Testing and Customer Acquisition: OwnMali must follow a predefined plan for testing its platform and acquiring customers.
- Exit and Commercial Rollout Plan: A clear roadmap must be developed for exiting the sandbox and commercially rolling out the product.
- Regular Reviews and Risk Management: Quarterly product reviews and a comprehensive risk management framework must be conducted, addressing emerging risks and factors.
- Monthly Updates: Monthly progress reports, including challenges and opportunities, must be submitted to the Sandbox Review Committee.
- Compliance with AML/CFT/CPF: OwnMali must comply with anti-money laundering, counter-terrorism financing, and counter-proliferation financing frameworks under the Proceeds of Crime and Anti-Money Laundering Act (PCAML Act) and other relevant regulations.
- Financial and Investor Records: Detailed records of all financial transactions, key milestones, data, and investors must be maintained.
- Regulatory Approvals for Additional Features: OwnMali must seek necessary regulatory approvals before developing any additional product features.
- Pre-approval for Property Tokenization: Prior to acquiring and tokenizing any property, OwnMali must seek the Authority’s no objection, providing granular details of the property and prospective investors.
- Final Report Submission: A comprehensive report on the product’s performance and compliance must be submitted at the end of the testing period.
Background and Context
CMA Kenya initially opened its regulatory sandbox to non-crypto blockchain firms in 2019. However, it wasn’t until 2022 that the authority announced it would also accommodate crypto and blockchain startups. Despite this announcement, no blockchain startups had been onboarded until now.
Since the sandbox’s inception, 24 applications have been submitted, with at least nine related to blockchain technology and real estate tokenization. The authority has faced several challenges with blockchain firms in the sandbox, but the admission of OwnMali signals a positive shift in its approach to blockchain and crypto solutions.
Other Blockchain Products in the Sandbox
OwnMali joins three other blockchain-based products in the CMA Kenya regulatory sandbox:
- AlphaBloq
- Belrium Kenya
- Pyypl
These inclusions highlight the growing acceptance and integration of blockchain technology within Kenya’s financial regulatory framework.
Conclusion
The admission of OwnMali into the CMA Kenya regulatory sandbox is a notable development for the blockchain and real estate sectors. By enabling fractional property ownership through tokenization, OwnMali is set to make real estate investment accessible to a broader population. As the platform navigates its 12-month testing period, it will be crucial to observe its adherence to regulatory requirements and its overall impact on the market.
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