The mainstream adoption of cryptocurrencies has brought enormous potential to the fintech industry, some of which has already trickled down to the real estate market. Subsequently, the real estate industry is evolving to accommodate a new wave of investors who prefer to use cryptocurrencies for payments.
The trend of using cryptocurrencies to invest in real estate is gaining momentum in 2021 after the market exploded as Bitcoin (BTC) crossed the $60,000 mark. Today, due to its transformative impact, many jurisdictions have amended their real estate laws to allow the purchase of property using cryptocurrencies.
Alexander Tkachenko, CEO and founder of the VNX liquidity mining platform, told Cointelegraph that the full capabilities of cryptocurrencies in the real estate sector are untapped.
“Demand for alternative financial and payment instruments remains high around the world,” he said, while adding that favorable regulation would go a long way toward creating a more conducive environment for both industries:
“Develop regulations that will set clear rules for industry players and protect investors.”
Scott Scherer, CEO of Owners Unity, a company that allows homeowners to generate passive income from their assets through a decentralized finance (DeFi) model, echoed Tkachenko, telling Cointelegraph that “investors and governments There has been an acceptance of the fact that cryptocurrencies are here for the long term.”
Investors are increasingly using cryptocurrencies for transactions due to the efficiency of encrypted networks compared to traditional banks, he added.
Anastasia Kor, chief marketing officer and board member of innovative MetaFi ecosystem Choise.com, told Cointelegraph that novel blockchain concepts such as real estate tokenization are also attracting global investors:
“Predictions that tokenization will help improve real estate liquidity are not far from the truth. Tokenization will allow luxury properties limited to one region to be located and made global and available to interested buyers and buyers around the world. used by investors.”
So, which countries currently support buying real estate with cryptocurrencies?
Thailand was one of the first Asian countries to legalize the use of cryptocurrencies. The country currently allows real estate buyers to use cryptocurrencies for payments. Investors wishing to use this method of payment will need to seek the services of a local accredited real estate agency that accepts the virtual currency.
While the country has previously banned cryptocurrency trading, the ban is lifted February 2014. Today, trading of major cryptocurrencies such as Bitcoin, Ripple (XRP), Ethereum (ETH) and Stellar (XLM) is allowed under the rules set by the Thailand Securities and Exchange Commission (SEC).
Notably, while individuals are allowed to trade cryptocurrencies, regulated financial institutions operating in the country, including banks, are not. As a result, buyers looking to purchase property in Thailand using cryptocurrencies are expected to use alternative remittance systems to settle transactions.
united arab emirates
The United Arab Emirates is a top business destination and is becoming a major crypto hub, with many international crypto organizations setting up shop in the country to capitalize on its budding status. The cryptocurrency market in the country has grown several times over the past two years and is expected to grow tenfold in the next few years, all things remaining the same.
The country has long been a poster child for the architectural marvels that have made it the leading real estate powerhouse in the Middle East/North Africa. Some of the country’s aggressive structures have developed through government-led initiatives aimed at stimulating interest in the local real estate market.
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The convergence of the cryptocurrency and real estate industries has led to the establishment of a synergy between the two industries in an effort to open the real estate industry to global investors and accelerate the development of its non-oil economy.
Currently, crypto users in the UAE can purchase houses, villas, apartments and buildings with digital currencies through authorized institutions.
In terms of regulation, central banks have not yet designated cryptocurrencies as legal tender, so there are some limitations, such as the lack of crypto service offerings by banks. However, crypto transactions between individuals and some regulated real estate institutions are permitted.
Cryptocurrency adoption is high in Turkey, with more than 8 million Turkish citizens owning digital currencies. Adoption has been spurred by a myriad of factors, including runaway inflation that devalued the Turkish lira.national currency has lost Over the past two years, more than 50% of its value against the dollar.
Real estate agencies in the country have begun accepting cryptocurrency payments as more and more people use cryptocurrencies for transactions.
Investors can purchase property in the transcontinental country through regulated real estate agencies. People are also eligible for direct citizenship if they wish to invest at least $250,000 in fiat currency or the cryptocurrency equivalent through the Turkish Golden Visa Programme.
Portugal is one of the most crypto-friendly countries in the European Union. So it’s no surprise that the government allows investors to buy real estate using cryptocurrencies. In previous years, cryptocurrencies were allowed to buy real estate, but the money had to be converted into fiat currency to complete the property transfer. That changed in April when new relevant laws were introduced.
The latest regulations allow notaries to approve real estate transactions involving cryptocurrencies. In addition, digital currencies do not have to be converted to fiat currency for property title transfers to be valid. The new rules classify these types of transactions as barter transactions.
Montenegro is one of the most financially liberal countries in the Balkans. When it comes to crypto, the country has no special requirements for cryptocurrency transactions, including the purchase of crypto real estate. Notably, the country has made a conscious effort to become a major cryptocurrency hub in recent years due to potential macroeconomic benefits.
In April, it granted citizenship to ethereum co-founder Vitalik Buterin as part of a campaign to attract cryptocurrency investors to the country.
Real estate investors looking to buy property in Montenegro using cryptocurrencies will hardly face any problems, as long as the transaction is approved by a certified notary.
Georgia has a lot to offer investors and has many laws designed to encourage foreign investment. For example, investors looking to put their money in the country can pay zero taxes on capital gains, including returns on crypto investments. There are also no currency transaction restrictions.
While it is possible to buy real estate with cryptocurrencies in Georgia, it is important to note that cryptocurrencies are not regulated in the country, so the final purchase figures entered in the property register must be legal.
Property purchases using cryptocurrencies can only be made through certain licensed real estate agencies that offer this service.
More than 2.5 million Canadians own cryptocurrencies, according to To Finder’s October 2022 Crypto Adoption Report. This dynamic has led to more real estate companies in the country accepting cryptocurrency payments.
For investors looking to use cryptocurrencies to purchase real estate in Canada, authorizing real estate companies to accept cryptocurrency payments can help ensure compliance.
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Some realtors also offer crypto-to-fiat conversion services to simplify the process, as real estate sales on official registries must be denominated in Canadian dollars.
Cryptocurrency users looking to purchase property using digital coins should consult a tax advisor before beginning the buying process to avoid tax complications, as Canadian regulations impose capital gains tax on cryptocurrencies.
Cryptocurrencies have the power to unlock notoriously illiquid real estate markets. Allowing the purchase of real estate in cryptocurrencies not only diversifies payment channels, but also makes it easier for international investors dabbled in cryptocurrencies to acquire real estate assets globally.