Vlad Kostiuk: Good afternoon, Mr. Georgiou. Thank you for taking the time to speak with us today. Our magazine’s motto is “The Voice of the Digital Era.” Our readers are already familiar with the non-profit organization FUTURUM Platform from Lithuania, about whose initiatives and programs we have published materials. You have started collaborating with this organization and have now attracted a large international team to your digital initiatives and projects in the Republic of Cyprus. What is the essence of this collaboration?

Mr. Georgiou: Good afternoon! Thank you for the invitation and the opportunity to speak on your platform. Yes, that’s right! I specifically registered the company PLS Smart Finance Solutions Ltd., which will become the initiator and driver of several major projects in the digital and AI sectors, which we have been working on and preparing for implementation for a year and a half.

This is a comprehensive program of digitization and tokenization in several directions of our upcoming activities: real estate and investments in it, large construction projects, and three international projects that can have a significant positive impact on our country’s economy.

We have divided our projects into investment portfolios to distribute risks, something like an umbrella fund. We have taken into account the experience gained in the world of finance in project financing and securitization of non-banking assets and developed our own unique model, or, if you like, an ecosystem that will have its own Real Asset Token and a blockchain clearing system.

Vlad Kostiuk: Could you tell us a little more about the Real Asset Token (RAT) and its main objectives?

Mr. Georgiou: Real Asset Token (RAT) is a digital token based on blockchain technology. Its main objective is to tokenize valuable assets, both movable and immovable, to increase their liquidity, transparency, and accessibility for investors. By converting ownership rights or profit share rights into digital tokens, we aim to impact the traditional investment landscape and make valuable assets more accessible to a wide range of investors, including the crypto market. For example, the real estate market on the island traditionally occupies a large share of our economy. This market is very attractive to both local and foreign investors. However, this sector also has its problems – many restrictions, bureaucracy, obstacles, intermediaries, a complex system of property rights registration, etc. Imagine if these problems could be solved with blockchain and smart contracts? That means transparency, automation, and clarity for all parties involved in transactions, including regulatory authorities and banks. Our token is a tool within this developing system.

Vlad Kostiuk: This sounds fascinating. Why did you choose Cyprus as the base for implementing this concept?

Mr. Georgiou: Well, first of all, Cyprus is my life; I was born and live here! Ask any Cypriot, no matter where they live, they are patriots of their country. Secondly, Cyprus offers a highly favorable environment for our activities due to its strategic location, excellent infrastructure, and attractive tax regime. Everyone knows that our country has a well-established legal system, liberal policies, and, in recent years, a progressive stance on blockchain and digital currencies. From my perspective, it is an ideal platform to launch such a program, refine it, develop it, and then maybe expand it to other countries.

Moreover, not only does the growing real estate market in Cyprus offer many opportunities for investment and development, but there is also an influx of specialists in the digital sector who have chosen Cyprus for both business and as a favorable place to live. Over the past few years, we have seen the establishment of IT companies, both foreign and local, with whom we plan to cooperate. By combining our efforts, we can do a lot to make Cyprus one of the leading countries in digitalization and the development of distributed ledgers and AI.

Vlad Kostiuk: Can you tell us more about the current state of the real estate market in Cyprus and its prospects?

Mr. Georgiou: Of course. The real estate market in Cyprus shows stable growth and attractiveness to investors. Residential property prices continue to rise. The premium segment, especially in cities like Limassol and Paphos, is very attractive to foreigners. Last year, transactions in the real estate sector amounted to nearly 6 billion euros. The high demand is driven by political stability, the development of tourism, and programs for obtaining permanent residence and citizenship through real estate purchase. This is of interest to both EU residents and foreigners coming to us from outside the EU. Our project also covers the tourism sector, and we have our own know-how for this. I can’t say more in detail yet because the model is still being finalized, and we need a few more months.

Vlad Kostiuk: What advantages does blockchain technology offer in the context of real estate tokenization?

Mr. Georgiou: Blockchain technology significantly increases liquidity since tokens can be freely traded on digital platforms and crypto exchanges. I think your knowledgeable readers do not need to be told the size of this market and the sums in crypto that are involved there.

Whether we like it or not, we are really in the transition to the digital era and entering the age of Artificial Intelligence. We need to adapt, rebuild, and develop new systems and technologies. I am an enthusiast of blockchain and AI. This is our future! Our children will live in a completely different world. The sun won’t change, the sea won’t change, but life will change! Those who don’t feel this will be left out, an outsider, and most likely a deeply unhappy person “overboard.”

First of all, blockchain provides complete transparency since all transactions are recorded in a chain system that cannot be altered and is protected from tampering. Moreover, our developed system expands accessibility, allowing both institutional and private investors to participate in markets that were previously inaccessible. Automation through smart contracts reduces administrative costs and speeds up processes like income distribution and asset management.

Vlad Kostiuk: What specific projects or assets will be tokenized under the RAT initiative, at least initially? I understand the market is large and the possibilities are limitless…

Mr. Georgiou: We have formed diversified investment portfolios, including residential and commercial real estate, land assets, and large-scale development projects. For example, one of the key projects is the construction of a European retirement home in Cyprus. This project will be managed through our platform and financed through the issuance of RAT tokens. Additionally, we have portfolios dedicated to rental properties, increasing their liquidity, as well as projects for the creation and development of digital hubs and AI data centers. The Free University of Digital Technologies project is very interesting because this university is based on a specialized neural network and a whole range of AI tools. This is a new and democratic level of higher education adapted to any person. Our company has reached an agreement that the European headquarters of this university will be located in Cyprus.

Vlad Kostiuk: How do you see the future of RAT tokens and their impact on the investment landscape?

Mr. Georgiou: I believe that the Real Asset Token (RAT) has the potential to significantly change the investment landscape by making valuable assets more liquid and accessible. It democratizes investment opportunities, allowing smaller investors and crypto investors to participate in profitable markets. For example, how do you finance a €160 million project, such as a retirement home? A bank loan? Forget it! But an investment share with a minimum entry threshold of 50 RAT tokens (1 RAT equals 1 USD), with RAT listed on the world’s largest crypto exchange, gives millions of investors the opportunity to claim earnings from this project and benefit from the token’s value growth on the secondary market. Investors need to see the project, understand its profitability, guarantees of transparency, immutability of rules, and the freedom to enter and exit the project (conversion to fiat). Is this attractive?

In the long term, I see that the RAT token paves the way for more innovative financial products and services, fostering a more dynamic and inclusive financial ecosystem. Naturally, we have our own development and expansion plans.

Vlad Kostiuk: What challenges or problems do you see in implementing this concept, and how do you plan to solve them?

Mr. Georgiou: One of the main challenges is complying with regulatory requirements in various jurisdictions. We closely collaborate with legal experts to ensure that all our activities meet local and international regulations. Another challenge is market acceptance of our project. We plan to address this through extensive marketing and educational campaigns to inform potential investors about the benefits of tokenization and blockchain technology. Finally, we focus on ensuring the security and reliability of our platform to gain and maintain investor trust. But the main thing is the crypto community itself! We hope to bring many qualitatively new and interesting opportunities and arouse interest and support.

Vlad Kostiuk: What prospects do you see for scaling this technology to other countries if the project is successful in Cyprus?

Mr. Georgiou: Successfully implementing our model in Cyprus can serve as an example for other countries and markets. We plan to expand into other European and international markets where there is a need for increased liquidity and transparency of assets. Our experience in Cyprus will help us adapt the model to various legal and economic conditions, ensuring the global application of tokenization technology. Experience is needed, it must be gained to earn trust. We need to show a working system. That’s our task!

Vlad Kostiuk: Can you name other projects in your investment portfolios and how they might affect the future of the island?

Mr. Georgiou: One of our promising projects is the creation of a data center and a smart city in Cyprus. An AI-based data center will help attract technology companies and specialists to the island, contributing to the development of the local economy and increasing the level of digitalization. The smart city will include modern infrastructures and technologies, such as IoT, green energy solutions, and automated management systems. Maybe it will be a specialized smart city for the youth of Cyprus.

An interesting proposal came to us from one of the future investors of our platform, who has already become our partner. However, this proposal needs to be discussed and considered, perhaps as a government program at the level of the government and deputies. He suggested creating a portfolio that would include rented lands, presumably from the state, the church, and/or private landowners, for the construction of real estate objects that are actually movable. We are talking about modern smart homes with an area of up to 40 square meters. Such houses would be suitable for young people, newlyweds, foreigners who love the sea, and retirees who cannot afford to buy a home. If idle lands are leased for 50 or 99 years, they will start bringing income to landowners, meaning taxes to the treasury, and, most importantly, this is a social program that addresses the vital problems of a fairly large part of the population of Cyprus. Such a smart home can be bought for 25-30 thousand euros or rented for 300-400 euros per month. Many residents and tourists can afford this. This will revive the market! Interestingly, the land is not burdened with real estate, the title is not needed, the houses are mobile, eco-friendly, comfortable, and can be installed on-site in 2 hours.

These projects I have mentioned can become noticeable and positively impact the innovative image of our country.

Vlad Kostiuk: This sounds very ambitious and promising. I already want such a house by the sea! How do you plan to attract international investors to participate in these projects?

Mr. Georgiou: Our goal is to show investors the opportunities and advantages that Cyprus offers, as well as the innovations we are implementing. We are confident that we can attract significant investments and support the growth of Cyprus’s economy. We also count on the support of relevant ministries and the parliamentary corps and hope that Cypriots will support us.

Vlad Kostiuk: Thank you for the interesting conversation, Mr. Georgiou. We wish you success in your projects and look forward to following their development.

Mr. Georgiou: Thank you! It was a pleasure to share our plans and ideas. 

EDITOR’S NOTE:

Examples of Using Blockchain and Tokenization in Real Estate

Blockchain and tokenization are actively penetrating the real estate sector, offering numerous benefits such as increased liquidity, transparency, and accessibility for small investors. Here are a few examples and materials demonstrating the successful application of these technologies in real estate.

Examples of Successful Projects

St. Regis Aspen Resort: This project was a pioneer in the field of real estate tokenization, offering digital tokens representing a share in the ownership of a luxury resort in Aspen, Colorado. The project raised $18 million, opening access to investments in high-value assets for a wide audience of investors.

RealT: The RealT platform allows investors from around the world to invest in the U.S. real estate market through the tokenization of real estate properties. RealT is particularly focused on the rental market in Detroit, offering investors passive rental income and access to premium assets with low entry barriers.

Meridio: Meridio uses blockchain to create opportunities for fractional ownership in real estate. This reduces entry barriers, making real estate investments accessible to a broader range of people than traditionally possible.

Advantages of Real Estate Tokenization

Increased Liquidity: Tokenization allows property owners to instantly obtain liquidity by selling small shares of their property. For investors, this means the ability to buy and sell tokenized real estate at any time on digital trading platforms, providing greater flexibility.

Fractional Ownership: Tokenization simplifies the process of fractional ownership, allowing small investors to acquire shares in high-value real estate. This eliminates entry barriers and makes premium real estate accessible to a broader range of investors.

Automation and Efficiency: Smart contracts can automate functions such as rental payments and property transfers, significantly reducing transaction time and costs, eliminating intermediaries, and reducing fraud risks.

Key Challenges and Prospects

Regulatory Issues: Regulatory matters remain a major challenge for real estate tokenization. Harmonized rules and clear guidelines for issuers and investors are necessary to ensure compliance with investor protection and anti-money laundering requirements.

Infrastructure and Technological Challenges: Building a secure, scalable, and user-friendly platform for tokenization requires significant technical effort. This includes integration with existing real estate and financial systems, ensuring transaction security, and standardizing protocols for token issuance and trading.

Market Adoption: Traditional investors and real estate professionals may be skeptical about blockchain technologies due to a lack of knowledge or understanding of their benefits. Educational initiatives and demonstrating successful cases can help overcome these barriers.