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Global Financier Stephane De Baets Pioneers Real Estate Tokenization With Release of AspenCoin

Worth recently sat down with De Baets to learn about his storied career in finance and how AspenCoin is changing the way we think about commercial real estate.

Photo courtesy of Quantitatives via Unsplash

When cryptocurrency was first introduced to the world with the release of Bitcoin in 2009, Stephane De Baets was mobilizing his holding company, Elevated Returns, to acquire one of Aspen’s most cherished resorts, the St. Regis. Little did he know at the time, nearly 15 years later, he would be the first to tokenize commercial real estate, using the St. Regis as a backing asset.

Originally hailing from Belgium, De Baets moved to Southeast Asia where he began his career as an investment banker. Since then, the globetrotting entrepreneur has founded multiple companies including Elevated Returns, which manages over $500 million in assets, and Chef’s Club, an innovative restaurant group that features some of the world’s best chefs at its iconic locations. By keeping a finger on the pulse of emerging crypto markets, De Baets saw an opportunity for innovation. In 2018, he minted AspenCoin, a unique way for patrons of the St. Regis to hold ownership and receive perks from the resort.

Worth recently sat down with De Baets to learn about his storied career in finance and how AspenCoin is changing the way we think about commercial real estate.

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Q: When did you found Elevated Returns? What’s the story behind Elevated Returns?

A: It’s my little baby. I was born and raised in Europe and migrated to Southeast Asia in the early ‘90s; I was a broker, then investment banker. I paid a lot of attention to the restructuring of the loan portfolios in Southeast Asia. In [2008], the U.S. went through its own crisis with Lehman Brothers and the subprime [mortgage crisis]. We decided to start acquiring good quality assets in the United States, and I created my holding company here. I was a hospitality investment banker

When did you purchase the St. Regis?

I purchased it in 2010. It was a typical unique opportunity, an irreplaceable asset. The property needed lots of capital for renovation. [This] was in the aftermath of Lehman Brothers. So, we made a deal where we bought the property cheap and gave the original management company a 50-year contract. We love Aspen, we love the property. The appeal of the ski resort has only been growing for the last 10 years, and it’s become a super prime property and destination and people love it. Because we are not a big fund, I’m very passionate about my investments, and I spend lots of time making sure the final product is right. It’s a passionate active investment.

Can you talk a little bit about what your role at the St Regis looks like?

I live in Aspen. I manage the management. We have an extremely good relationship between owner [and] operator. This is an active management for us; we’re very passionate about what we do, and we have an amazing collaboration with the management.

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Where did you get the idea for AspenCoin? Do other hotels have similar projects?

In 2018, we did the organization of 19 percent of the property; it means the property remains private but through the tokenization, you create an instrument that anyone can buy without having to go through due diligence or document review, etc. In 2020, we listed those tokens on an exchange called tZERO, and now we’re going one step further and allowing them to receive cash back on their stay when they stay on the property. That is very significant because it means anyone who owns a certain amount of tokens is being treated as an owner. We want everyone to be treated equally and feel like they’re a true owner.

I think right now, we’re very happy with being a pioneer in tokenization. We think that tokenization will be a big thing in the very near future, and we want to tokenize other properties we have. It’s super exciting to know that people who love staying at the property can own a piece of it.

How do you think crypto projects will affect the future?

Let me rephrase that. It needs to be qualified, because people tend to use the word crypto for anything that’s [a] digital token. Within crypto, there is very good innovation that will change the world. I think all securities will be digital in the future, I believe we will have new forms of investments, and people will begin selling the rights to utilities. That’s where the innovation will be powerful.

Do you think other business leaders should get involved with crypto?

Yes, eventually all financial products will be digitized; ignoring it would equate to ignoring the internet in the late ‘90s. I think that what happened in 2021 is that the crypto adoption went past the line of no return, and that is further validated by [President Joe] Biden’s infrastructure bill—there was a crypto tax. You only tax what you allow. The fact that the government made clear that there’s going to be crypto taxation means we know it’s here to stay. You’ll see the top business leader in each industry, asset management, distribution, they’re experimenting, they’re trying. Some are going to be the early adopters of the technology, and some are going to have to play catch up.

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Given what’s happening currently in the world, how it relates to crypto and travel? 

I believe digital financial products will give more equal opportunities to all. In the light of rising inflation and geo-political instability, it will give options to people who nowadays do not have access to the right financial products. What we’re seeing right now is a lot more interventionism by states and authorities, and one of the flexibilities of crypto is you can actually self-custody on wealth. If you have money, you [may] stash it in your mattress, but with crypto, you can have millions and billions when the time is right. I am sure that with all the sanctions and censorship, the very fact that you can self-custody on wealth must be appealing to a lot of people.

What are some of the benefits of projects like AspenCoin, i.e., tokenizing property?

Enable anyone to own a part of a trophy property and enjoy the economic benefit of such ownership, as well as the status of being recognized and a “owner.” The benefit for the issuer is you target your customer. For the customer, you are able to own a portion of an investment that would [otherwise] be impossible to own. One the consumer side is access and democratization. It’s very important to draw a direct relationship with your consumer. Rather than paying an interest to the bank, give your consumer a return.

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