Case for Blockchain in Land Registries – TSC Pilot

The Transaction Support Centre (TSC) and its partners Seso Global and 71point4 will expand the application of its Blockchain registry platform to informal settlements earmarked for upgrading. Our aim is to build a solution that can record and maintain data on property ownership prior to the registration of a title deed. Currently, this data exists on spreadsheets and in paper format, and there are no secure processes to enable owners to record transactions that might occur between the time the upgrading process begins and the title deeds are registered.

Since its development over ten years ago, Blockchain technology has been billed as a game changer for a plethora of industries. This includes property transfer and land registry is one that has gotten major focus as an area for Blockchain innovation. In poorer countries, where land ownership is often unregistered, there is potential for significant economic transformation through creating a transparent and transactable registry. 

However, despite the potential, many Blockchain land registry projects do not succeed. Through our experience thus far we have identified a few key reasons for this: 

1. The solution only involves the Government who writes onto the Blockchain giving only one entity control over the input. 

2. There is minimal field verification on the data being entered into the Blockchain thus the system is distorted from the start. 

Our platform sets out to solve these shortcomings through the development of a distributed system of data input onto the Blockchain from verified service providers. Before a deed is registered it is necessary to establish an uncontested claim on the property and trace the history of transactions on the property. This is supported by verified documents provided by a range of entities or service providers. Our distributed data collection platform connects these service providers to the platform via smart contracts to record when the document was requested, created and signed. Once the necessary documents are complete the client has proof of their occupancy and ownership, and this evidence can be used to enable local government and the financial sector to recognise ownership even prior to formal registration. 

As cities grow so will the need for land. While formal process to rezone and prepare land for housing may take time, the market does not wait. Where formal systems to allocate and track land ownership are slow to respond or are not accessible, informal systems develop. While these informal systems can provide some security to occupants within local communities, the property rights protected by these systems are not recognised by external parties including the state and the financial sector. 

Blockchain technology offers the opportunity for private entities to build registries through verified sources which can serve as the basis for the Government to formalize when there is the will and ability. 

In this pilot we will build a register that will show the history of ownership of the property, enable property owners to maintain their data and enable the Government and other service providers to view and, where necessary, validate transactions. This will enable more seamless formalisation and enable households to access most, if not all, the rights that are associated with formal property ownership prior to registration.