Backed by white-hot venture capital firm Fifth Wall, Harbor is making a new open source ‘R-Token’ to help other startups comply with regulations.

For the the heavily regulated real estate industry to see significant adoption of blockchain–the underlying system that powers popular cryptocurrencies such as Bitcoin and Ethereum–there needs to be reassurance that these new technologies are legal, secure, and above-board.

That’s why Fifth Wall Ventures, an L.A.-based venture capital firm focused on real estate technology and which has invested in the likes of Opendoor, is placing a big bet on Harbor, a new startup developing tech to make sure blockchain-based tokens and transactions comply with U.S. laws and regulations, as well as more niche legal requirements from specific business partners.

Fifth Wall today announced it has co-led a $10 million Series A funding round in Harbor, with Vy Capital and Valor Equity Partners. Simultaneously, Harbor announced the release of its first product of sorts: the “Regulated Token standard” or “R-Token,” a new, open-source standard for making sure cryptocurrency tokens and any subsequent transactions using such tokens comply with a given series of regulatory requirements.

Because Harbor made the R-Token open source, any other company can take the basic instructions and use them to launch their own specialized tokens for whatever purposes they desire, and build those tokens to fit a specific set of regulations.

“This is the first pitch of the first inning of what could be a sea change in real estate capital markets,” Fifth Wall co-founder and managing partner Brad Greiwe said.

Harbor is applying its technology to any private securities, including venture capital and private equity. Fifth Wall, with its focus on real estate, will provide expertise and guidance in the field.

Applying Harbor’s technology to the commercial real estate industry will likely come first, Greiwe said, with a more institutionalized world of investors. But the technology could definitely be applied to individual investors in residential real estate in the future, Greiwe said.

Many regulated assets like real estate haven’t fully leapt on board with blockchain yet because of the challenges of complying on the platform with government regulation standards like the Securities Act of 1933 and the Securities Exchange Act of 1934. The fact that these regulations apply to not just an initial offering but to every secondary trade — which could happen quickly on the blockchain — has made bringing securities to the platform more difficult.

“We haven’t seen a ton of traditional private securities being tokenized,” Harbor co-founder Arisa Amano said. “We thought that securities like real estate assets can benefit from the improved liquidity, transparency and fractional ownership possibilities of blockchain.”

The startup hopes that standardizing regulation practices on blockchain for these securities will lead to that improved liquidity, easier trading and even higher asset value.

From the cryptocurrency side, Fifth Wall believed that initial coin offerings would eventually be as subject to regulation as private securities and wanted to find a company that understood that.

“Investing in Harbor provides the window to see the blockchain market, especially in real estate and ICOs, expand full time,” Greiwe said.

Indeed, SEC Chairman Jay Clayton testified before Congress on Tuesday morning saying that his agency and various others wanted permission and power from Congress to develop a “a coordinated plan for dealing with the virtual currency trading market,” a note that sounded like further government scrutiny of the burgeoning ICO marketplace would be coming.

Last year alone, ICOs raised $5.6 billion, according to a report from VC firm Fabric Ventures (via Business Insider), and many more are planned for 2018.

Email Emma Hinchliffe