The collaboration between Ripple and the Colombian administration to tokenize real estate in the country is stalling. This partnership is coming up against fierce political resistance, since a new executive has just taken office. The new administration has classified the project in the register of non-priority files. This is a surprising setback, as this project aimed to end the inequitable distribution of land for decades in Colombia. As a reminder, the old system put in place by Ripple only allowed to upload a title deed in the XRP ledger.
Ripple’s plan to tokenize land in Colombia stalled
A collaboration between Ripple Labs and the Colombian government for the tokenization of real estate was in the pipeline. Stakeholders in this partnership were the Colombian national land agency, Peersyst Technology (known for software development) and Ripple. The idea was simple: to facilitate the process of finding a property in complete transparency, with pricing accessibility and efficient monitoring of financing and payment.
But, following the change of administration, it seems that not everything will go as planned. Indeed, the Ripple project has just left the field of priority files and may never see the light of day at the rate things are going. This comes only some time after the announcement of the project by the Colombian Minister of Information Technologies and Communications of the former government. Two weeks later, Gustavo Petro, the new president, won the elections with the intention of turning everything upside down.
The old regime in place maintains that with a register visible to all, land distribution will be more transparent. An idea that does not seem to convince the new government, which would rather put in place a new reform. In it, the State will be able to buy the land used illegally or quite simply unused. Once this is done, he can then redistribute them to rural farmers. The Acting Director of the National Lands Agency, Juan Manuel Noruega Martinezdid not fail to point out, speaking of the tokenization of real estate, that: “This is not one of the projects defined in the PETI[Plan Stratégique des Technologies de l’Information]”.
Why this reversal of the Colombian government?
This blockade by the Colombian government is not helping farmers, but especially Ripple. The Ripple crypto project is currently in the midst of a legal battle with the SEC for facts that date back to 2020. Indeed, the American financial policeman is suing Ripple Labs for alleged sales of XRP without it being registered as a security. The SEC is quite firm, according to it Ripple used XRP as a means of transferring funds rather than an investment.
A case that has not yet known an outcome and which has certainly had an impact on the Colombian administration. Indeed, such a change is surprising, especially since the new president has already shown affection for the cryptocurrencies. In addition, the 2016 peace agreement is favorable to the formalization of titles. This formalization makes it possible to restore formal rights to farmers over the land. With such a lack of precision, farmers will be less inclined to invest in land. Worse still, no bank will want to extend credit to them. It should be noted that these lands cannot be guaranteed.
Ripple comes up against the reluctance of the Colombian administration for the tokenization of real estate. With the new executive, the whole project, which was on the right track, was abandoned. Much to the dismay of farmers, who will still have to wait before their situation improves.
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