Cryptocurrencies have brought immense potential to the fintech industry, and some of the capabilities have spread to real estate. Consequently, the real estate sector is evolving to accommodate a new generation of investors who prefer to make payments in cryptocurrency.
After Bitcoin's market explosion in 2021, real estate investing with crypto gained momentum
Bitcoin $16,552 We have exceeded the $60,000 mark. Due to the transformative nature of cryptocurrency, numerous jurisdictions have amended their real estate laws to allow property purchases using this technology.
Founder and CEO of VNX liquidity mining platform, Alexander Tkachenko, told Cointelegraph that the full potential of crypto in the real estate sector has not yet been realized.
In addition, he stated that there is still a huge demand for alternative financial instruments in the world, while adding that favorable regulations would go a long way in creating a more enabling environment for both industries:
“Development of regulation that will create clear rules for industry players and protect investors.”
The CEO of Owners Unity, a company that allows homeowners to generate passive income from their assets through the use of decentralized finance (DeFi), echoed Tkachenko's comments, telling Cointelegraph, "Investors and governments alike are accepting that crypto will last for a long time."
Due to the efficiency of crypto networks as compared to conventional banks, investors are increasingly using cryptocurrencies to transact.
Anastasia Kor, chief marketing officer and board member of Choise.com, a MetaFi ecosystem, told Cointelegraph that novel blockchain concepts such as real estate tokenization also appeal to global investors:
“The projection that tokenization will help to make real estate more liquid is not far from the truth. Tokenization will position the luxury properties that are confined to a region and make them global and accessible to interested buyers and investors around the world.”
Which countries currently allow crypto-based real estate purchases?
Thailand was one of the first Asian countries to legalize cryptocurrency use. Currently, the nation allows buyers of real estate to pay using cryptocurrency. It is necessary for investors who wish to utilize this method of payment to seek the services of local accredited real estate agencies that accept virtual currencies.
The nation had previously banned cryptocurrency trading, but this ban was lifted in February 2014. Bitcoin, XRP, and other major cryptocurrencies are traded today
XRP $0.38, Ether ETH$1,166, and Stellar XLM $0.088 is allowed in accordance with rules stipulated by the Thai Securities and Exchange Commission (SEC).
While individuals are allowed to deal in cryptocurrencies, regulated financial institutions operating in the country, including banks, are not. The use of alternative money transfer systems is therefore expected to be used for the settlement of transactions by buyers interested in purchasing property in Thailand.
United Arab Emirates
A number of international crypto organizations are setting up shop in the United Arab Emirates to take advantage of the country's burgeoning status as a business destination. Over the past two years, the cryptocurrency market has grown multi-fold and is expected to grow ten-fold over the next couple of years, provided all other conditions remain the same.
In recent years, the nation has been recognized as a leading Middle East/North Africa real estate powerhouse through exemplary architectural wonders. The government has taken a number of initiatives to stimulate the local property market, which has resulted in some of the nation's radical structures.
Cryptocurrency and real estate have become increasingly intertwined, resulting in an effort to open up the real estate sector to global investors and accelerate its development as a non-oil economy.
It is currently possible for crypto users in the UAE to purchase houses, villas, apartments, and buildings using digital currencies through authorized agencies.
As far as regulation is concerned, the central bank has not yet designated cryptocurrencies as legal tender. Therefore, there are a few limitations, such as the inability of banks to provide crypto services. Nevertheless, crypto transactions are permitted between individuals and some regulated real estate agencies.
Over eight million Turkish citizens own digital currencies, making cryptocurrency usage high in the country. There are several factors contributing to the adoption of Bitcoin, including runaway inflation, which has resulted in the devaluation of the Turkish lira. Over the past two years, the national currency has lost more than 50% of its value against the United States dollar.
Since more and more people are using cryptocurrency to transact, real estate agencies are beginning to accept payments in cryptocurrency.
Real estate agencies regulated by the government can assist investors in acquiring property in the transcontinental country. Through the Turkish golden visa program, individuals who invest at least $250,000 in fiat or the equivalent in crypto can also obtain direct citizenship.
The Portuguese government is one of the most crypto-friendly in the European Union. Thus, it should come as no surprise that the government has made it possible for investors to purchase real estate properties using cryptocurrencies. In the past, crypto was allowed to be used to purchase real estate, but the money had to be converted into fiat before a property transfer could take place. The pertinent laws were introduced in April, which changed this situation.
The latest statutes permit notaries to ratify real estate transactions involving crypto assets. Furthermore, digital currencies do not have to be converted into fiat currency in order for property ownership transfers to be valid. According to the revised rule, these types of trades are classified as barter transactions.
When it comes to cryptocurrency transactions, including crypto real estate purchases, Montenegro is one of the most financially liberal nations in the Balkans. The country has, in recent years, made conscious efforts to become a major crypto center due to its potential macroeconomic benefits.
As part of a campaign to attract crypto investors, it awarded Ethereum co-founder Vitalik Buterin citizenship in April.
When a certified notary is involved in the transaction, real estate investors using cryptocurrencies have little difficulty purchasing property in Montenegro.
Georgia offers a great deal to foreign investors, and there are a number of laws that promote foreign investment. In this country, investors who wish to invest their money pay no taxes on capital gains, including returns on cryptocurrency investments. Currency transactions are also not subject to limits.
While it is possible to purchase real estate in Georgia using cryptocurrencies, these are unregulated in the country, so the final purchase figures must be recorded in fiat currency.
It is only possible to purchase property using digital assets through licensed real estate agencies that offer this service.
According to Finder's Crypto Adoption October 2022 report, over 2.5 million Canadians own crypto. As a result of this dynamic, more real estate firms in the country are accepting cryptocurrency payments.
Purchasing property in Canada using cryptocurrency requires authorized real estate companies that accept cryptocurrency payments to ensure compliance.