Mortgage Token

Market Context

Crypto assets are evolving into a recognized alternative asset class, extending beyond cryptocurrencies to stablecoins, real-asset tokenization, and the tokenization of balance-sheet items such as deposits. In this context, mortgage tokenization represents a particularly relevant use case for Switzerland.

The Swiss mortgage market is disproportionately large compared to other countries and remains the most important business model for domestically oriented banks. After more than 30 years of rising real estate prices, falling interest rates, and low default rates, concerns are growing about a potential reversal of these trends and the resulting systemic risks.

Project Scope

This research project examines how Distributed Ledger Technology (DLT) can enable the creation of programmable mortgage tokens and how such instruments could structurally improve the Swiss mortgage ecosystem.

Objectives and Expected Benefits

The project explores the potential of mortgage tokenization to increase efficiency by reducing administrative and refinancing costs. It further assesses how fractional ownership could unlock liquidity and broaden investment access without fundamentally altering the underlying mortgage assets.

In addition, the project evaluates Switzerland’s innovation-friendly regulatory framework and its suitability for supporting mortgage tokenization. The use of DLT may enhance transparency, compliance, and risk distribution, addressing structural weaknesses in traditional mortgage markets.

Strategic Impact

Ultimately, the project aims to strengthen Switzerland’s position as a global leader in digital finance and to assess whether mortgage tokens could contribute to greater resilience in the Swiss real estate and mortgage market.

The research project is organized by the Institute of Financial Services Zug (IFZ) at Lucerne University of Applied Sciences and Arts (Hochschule Luzern).