Ripple Blockchain Plans For Colombian Real Estate Fail To Take Off
Two weeks before newly-elected President Gustavo Petro was sworn in as Colombia’s highest public office, the previous administration’s Information Technology and Communications Ministry announced it would register land titles in the registries. blockchain in partnership with Ripple Labs, creator of the Ripple payment protocol, and software development company Persyst Technology.
Colombia spent 52 years ravaged by a civil war that only ended in 2016, and the inequitable distribution of property was one of the main problems. Property records were poorly maintained, and a transparent blockchain system of property rights verification seemed like the ideal solution to establish a solid foundation for land ownership.
But the change in government has brought about a change in policy and the project seems to be going nowhere. Juan Manuel Noruega Martínez, acting director of the National Lands Agency, tells Forbes that the project is not part of the Agency’s strategic priorities for 2022.
“This is not part of the projects defined in the PETI [Strategic Plan for Information Technologies]“, he added in a statement written in Spanish.
“It is very possible that the project is now politically dead,” says Mauricio Tovar, co-founder of Blockchain Colombia, a community of crypto and blockchain entrepreneurs and scholars in Colombia.
Colombia’s history with land rights is long and tortuous. Over the years of drug wars and FARC terrorist attacks, more than 7 million people have been internally displaced, as reported by the United Nations Refugee Agency. After the historic peace agreement between the Colombian government and the Revolutionary Armed Forces of Colombia (FARC) in 2016, property rights once again became a political priority as the agreement called for comprehensive land reform that would address rural communities and indigenous people of Colombia who felt disenfranchised.
Petro made Colombian history this year as the first leftist guerrilla to be elected president. He campaigned on a platform of tax changes to alleviate the country’s high levels of inequality, but perhaps more dramatically, the administration promised to announce land reform in the coming months. Petro’s plan calls for the state to purchase land currently unused or used for illegal purposes and redistribute it to rural farmers. Given Petro’s political ideology, many are concerned about the prospect of land expropriation.
Iván Duque, Petro’s predecessor, took a different approach, prioritizing the allocation of real estate to rural and indigenous communities. During his term, more than 1,700,000 hectares were invested in the National Land Fund, intended to give these communities access to cultivable land.
The partnership with Ripple and Peersyst sought to build on this, using blockchain technology to make the land deeds involved in adjudication claims easier for users to view. At least initially, the blockchain system they devised was intended to record court-assigned properties, a common occurrence in Colombia due to the 2016 peace accord.
As talks continue between the companies and government agencies, the new administration appears to have deprioritized the project.
This would be a setback for Ripple, which is primarily known for its work with financial services. Diversifying into public-private partnerships and real estate could have been positive for the company, which is facing legal issues in the United States. The United States Securities and Exchange Commission (SEC) sued him in December 2020, alleging that XRP
The proposed initiative would have put title deeds on the XRP ledger. Once the government finalized the land reconciliation processes, supporting documents had to be added by Peersyst on the blockchain. Peersyst would then have created a certificate with a QR code that anyone could scan and view the documents associated with the auction process.
The project only went so far as to add only one deed to the ledger, file number 11774. Also known as “El Invernadero”, this land is located approximately 500 km southwest of Bogotá . Tender documents show that the land was officially registered with Omaira Quisaboni Maje’s in March 2021before it was uploaded to the XRP ledger and a certificate was created last month.
One possible reason for resistance to the system is the wide dissemination of information, says Antony Welfare, who works on global partnerships at Ripple Labs: “It’s not just Colombia that has the data, the whole world has it.”
Welfare and Ferran Prat, founder and CEO of Peersyst, countered that the information was already public, existing as certified and notarized government documents.
Colombia is not the first country to have flirted with the tokenization of land titles. Georgia, Honduras and Ghana have launched pilot programs. But according to Tovar, governments are unlikely to want to expand from there.
It’s at the time of widespread implementation, Tovar says, that “those incentives to not have transparency or not want something that can’t be changed come into play.”
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