Encouraging Property Investment In Indonesia, BTN Implements DIRE Tokenization

Photo: Doc. BTN

JAKARTA - PT Bank Tabungan Negara (Persero) Tbk (BTN) is the pioneer of tokenization of property assets in Indonesia through the Real Estate Investment Fund (DIRE) scheme based on blockchain technology. This scheme is made possible through the collaboration between BTN and Reliance Group and D3 Labs as blockchain technology providers for digital asset tokenization.

Previously, BTN was also noted to be a pioneer in asset securitization known today as KIK-EBA (Asset-Egun Effect Collective Investment Contract).

Director of Risk Management Setiyo Wibowo said BTN supports technological innovation in the financial sector through digital asset tokenization. The goal is that more investors can access property investment, both domestically and abroad.

"BTN will provide property assets that are still active as BTN debtors and meet the criteria to be underlying DIRE. The DURE will be issued and managed by Reliance to be subsequently tokenized by D3 Labs," said Setiyo in a written statement, Tuesday, July 30.

Meanwhile, the provisions for DIRE products have been issued for a long time since 2017 in accordance with OJK Regulation No. 64/POJK.04/2017 concerning Real Estate Investment Funds in the Form of Collective Investment Contracts. Abroad, this instrument is known as Real Estate Investment Trust (REIT). The institutions that issue DIRE will obtain a number of benefits, namely new funding to support business expansion, tax incentives, and convert non-liquid assets into liquid.

Meanwhile, investors who invest in DIRE will also get a number of benefits, including investment alternatives in the property sector that are very affordable, protection against inflation, and transparency.

Based on data on the KSEI website, so far there are only six DIRE products that have been published in the domestic capital market.

"It is not easy to sell property-based investment products, although many Indonesians are interested in investing in the property sector. With the DIRE tokenization, the market or investor base can become wider, there are more transactions, and the transfer of ownership is easier," explained Akhabani, President Director of PT Reliance, Investment Manager.

According to Tigran Adiwirya, CEO of D3 Labs, Indonesia is currently a primado' for global investors. This is reflected in the accumulation of foreign investment realization (PMA) which reached 946.4 million US dollars or equivalent to Rp14.19 trillion at the end of the first quarter of 2024. With this accumulation, Indonesia is seen as one of the most potential developing country markets in the world.

Blockchain adoption for digital tokenization of financial assets has been quite massive in recent years because the market is very liquid and efficient. The DIRE tokenization in the global market, continued Tigran, experienced rapid growth, reaching 178 million US dollars in September 2023 or growing around 90 percent from the position in 2022.

This growth is driven by the application of blockchain technology that opens access to new investment opportunities, providing opportunities for D3 Labs, along with BTN and Reliance to seize these opportunities.

"We want to help financial service institutions develop their product innovations and services by prioritizing safety, transparency, and accountability," said Tigran.

Furthermore, Setiyo said, the development of the DIRE Tokenization will be carried out through the Sandbox or joint trials of the OJK conducted by Reliance Group and D3 Labs.

"In this case, investors will buy DIRE offered by the Reliance Group and its inclusion unit will be converted into digital tokens by D3 Labs so that it can expand the market abroad," explained Setiyo.