Tokenized Real Estate: The Law and Tech of Digital Deeds

The advent of blockchain technology has generated bold claims that non-fungible tokens (NFTs) can fundamentally transform real estate. Proponents assert that digital assets can tokenize real property interests: the concept of using digital tokens to represent ownership rights in physical property. Their goal is to allow buyers and sellers to transfer real estate through simple blockchain transactions, thereby eliminating traditional intermediaries, reducing costs, and accelerating deal velocity. This Essay provides the first comprehensive legal analysis examining whether American law actually supports such a direct tokenization of real estate rights. Our investigation reveals a stark disconnect between technological capability and legal authority. While distributed ledger technology allows for the effortless creation of tokens that purport to represent real estate assets, current property law does not recognize such representations as legal transfers of real property ownership. We examine the fundamental requirements of real estate conveyancing under American law, including the statute of frauds, recording statutes, and title registration systems. We demonstrate that these legal frameworks create insurmountable barriers to the direct tokenization of real property interests. The Essay then explores alternative structures that might allow blockchain technology to play a meaningful role in real estate transactions while respecting existing legal requirements. We conclude by offering insights into how property law might evolve to accommodate blockchain innovation without abandoning the protective functions of traditional conveyancing systems.