RIO DE JANEIRO, BRAZIL – The Government Asset Management Company (EMGEA), which manages federal and other public administration assets and rights, will be the first government company to use blockchain technology to sell its properties, the company announced Tuesday night, December 15th.
In its first operation, 50 properties will be sold with discounts that may reach up to 68% of their market value – on average, the properties for sale have a 41% discount. The operation will be enabled by the partnership with Resale Startup, a real estate outlet that develops solutions for the management and sale of assets that are returned to the market from financial institutions, and will operate not as an auction, but rather as a public tender, where the best offer for each property secures the right of purchase.
“The focus of management is to comply with the guidelines outlined by the Federal Government, which aim to reduce the size of the State. This is one of the many initiatives that EMGEA has been pursuing with the aim of improving the management of its procedures, improving them even more and, consequently, enhancing their value and return for the federal government, whether in the sale of assets or in their privatization,” said Diogo Mac Cord de Faria, Special Secretary for Privatization, Disinvestment and Markets of the Ministry of Economy.
The use of blockchain technology comes at a time when EMGEA is trying to expedite the privatization process of the company’s current assets and leverage the operational and financial results.
“Our goal is that the real estate base be sold much faster, creating greater operational efficiency by reducing our costs with the maintenance of these assets. The initiative to do this using new technologies is in line with this goal, while we provide greater security for the sale of public assets. It is important to stress that the main mutual benefit is that these stagnant assets, such as houses, apartments and commercial rooms leave the hands of the federal government and reach Brazilians at much more affordable prices,” explained Fabio Rito Barbosa, president of EMGEA.
With the new solution, people interested in purchasing a property in public bidding can access the company’s website and submit their proposal online. From this moment on, the solution creates two “envelopes”, one called commercial, which contains values and payment conditions information, and the other called documental, which contains the obligatory documents to qualify for the purchase.
The proposed value (commercial envelope) is 100% encrypted, inviolable and identified by means of a token whose data will only be released after the end of the tender, when the ranking of participants becomes known.
Known as the technology behind cryptoactives, blockchain offers a number of other solutions for the real world, and has already been embraced by financial institutions and companies to improve processes such as issuance of documents – already used by Brazilian notaries -, tracking the production chain of industries, and performing financial operations such as repossession operations.
In the public sector, some initiatives have already been tested, but this is the first time it is implemented in the sale of federal real estate. “We are using technology to improve the process of selling public goods. State-of-the-art technology cannot be a ‘fad’, it must be used to generate real benefits for those using it,” said Paulo Nascimento, CTO of Resale.
To take part of the first Federal real estate sale operation with the use of blockchain technology, those interested may submit their proposals by January 15th, at 3 PM. After that, the proposals will be checked and the winners of each tender will then be disclosed by the company.