The mainstream adoption of cryptocurrencies has brought enormous potential to the fintech industry, and some capabilities have extended to the real estate market. Subsequently, the real estate sector is evolving to accommodate a new group of investors who prefer payments using cryptocurrencies.
The cryptocurrency real estate investing trend gained momentum in 2021 after the market explosion that saw Bitcoin (BTC) will exceed the $60,000 mark. Today, many jurisdictions have modified their real estate laws to allow real estate purchases using cryptocurrencies because of their transformative impact.
Alexander Tkachenko, CEO and founder of the liquidity mining platform VNX, told Cointelegraph that the full potential of cryptocurrencies in real estate remains untapped.
“There is still huge demand for alternative financial and payment instruments around the world,” he said, adding that favorable regulations would create a more favorable environment for both industries:
“Developing regulation that creates clear rules for industry players and protects investors.”
Scott Scherer, CEO of Owners Unity – a company that enables homeowners to earn passive income from their assets through decentralized finance (DeFi) model — echoed Tkachenko, telling Cointelegraph: “Investors and governments have started to accept the fact that cryptocurrencies are here for the long term.”
He added that investors are increasingly using cryptocurrencies for transactions due to the efficiency of crypto networks compared to conventional banks.
Anastasia Kor, chief marketing officer and board member of MetaFi’s innovative ecosystem, Choise.com, told Cointelegraph that new blockchain concepts such as real estate tokenization also appeal to global investors:
“The prediction that tokenization will help make real estate more liquid is not far from the truth. Tokenization will take luxury properties that are limited to a region and make them global and accessible to buyers and investors around the world.”
So which countries currently support real estate purchases using cryptocurrencies?
Thailand was one of the first Asian countries to legalize the use of cryptocurrencies. The nation in the present allows real estate buyers make payments using cryptocurrencies. Investors who wish to use this payment method are required to seek the services of local accredited real estate agencies that accept virtual currencies.
While the nation had previously banned cryptocurrency trading, the ban was picked up in February 2014. Today, major cryptocurrencies such as Bitcoin, XRP (XRP), ether (ETH) and Starry (XLM) is permitted in accordance with the rules set by the Securities and Exchange Commission of Thailand (SEC).
It is worth noting that while individuals can trade cryptocurrencies, regulated financial institutions operating in the country, including banks, cannot. As a result, buyers looking to buy property in Thailand using cryptocurrencies are expected to use alternative money transfer systems to settle transactions.
United Arab Emirates
The UAE is a top business destination and is emerging as a major crypto hub, with many international crypto organizations setting up shop in the country to capitalize on the promising state. The national cryptocurrency market has grown manifold over the past two years and is projected to grow tenfold over the next few years, all things being equal.
For a long time now, this nation has been a model of exemplary architectural marvels that have put the country on the map as a leading real estate powerhouse in the Middle East and North Africa. Some of the nation’s radical structures were developed through government initiatives aimed at stimulating interest in the local real estate market.
The convergence of the crypto and real estate sectors prompted the establishment to enable the synergy of the two industries in an effort to open up the real estate sector to global investors and accelerate the development of its non-oil economy.
currently cryptocurrency users in the United Arab Emirates they can buy housesvillas, apartments and buildings using digital currencies through authorized agencies.
On the regulatory front, the central bank has yet to designate cryptocurrencies as legal tender, so there are several limitations such as the lack of provision of crypto services by banks. However, crypto transactions between individuals and some regulated real estate agencies are allowed.
Cryptocurrency usage is high in Turkey, with more than eight million Turkish citizens owning digital currencies. The adoption is fueled by a myriad of factors, including rampant inflation that has led to the devaluation of the Turkish lira. The national currency has lost more than 50% of its value against the US dollar in the last two years.
As more people use cryptocurrency to transact, real estate agencies in the country are starting to accept crypto payments.
Investors can acquire property in a transcontinental country through regulated real estate agencies. People who invest at least $250,000 in fiat or crypto equivalent to purchase real estate can also obtain direct citizenship if they wish through the Turkish Golden Visa program.
Portugal is one of most crypto-friendly nations in the European Union. It is therefore no surprise that the government has allowed investors to buy real estate using cryptocurrencies. In previous years, the purchase of real estate with cryptocurrency was allowed, but the money had to be converted to fiat in order to complete the real estate transfer. This changed in April when new relevant laws were introduced.
The latest laws allow notaries to ratify real estate transactions involving cryptocurrencies. Additionally, digital currencies do not need to be converted to fiat for property ownership transfers to be valid. The new rule categorizes these types of trades as barter trades.
Montenegro is one of the most financially liberal countries in the Balkans, and when it comes to crypto, the country has no special requirements for cryptocurrency transactions, including crypto real estate purchases. The country has made a conscious effort to become a major crypto hub in recent years due to the potential macroeconomic benefits.
In April, it Ethereum’s award-winning co-founder Vitalik Buterin citizenship as part of a campaign to lure crypto investors to the country.
Real estate investors who want to buy property in Montenegro using cryptocurrencies face several problems if the transaction is approved by a certified notary.
Georgia has a lot to offer investors and has many laws that are aimed at promoting foreign investment. Investors who want to put their money in the country, for example, pay zero taxes on capital gains, including income from crypto investments. There are also no limits on currency transactions.
While it is possible to buy real estate using cryptocurrencies in Georgia, it is important to note that cryptocurrencies are not regulated in the country, so the final purchase values entered in the real estate registry must be in fiat.
Real estate purchases using cryptocurrencies can only be made through selected licensed real estate agencies that offer this service.
Over 2.5 million Canadians own cryptocurrencies, according to to Finder’s Crypto Adoption October 2022 report. This momentum has led to more real estate firms in the country accepting cryptocurrency payments.
For investors looking to buy real estate in Canada using cryptocurrency, licensed real estate companies that accept cryptocurrency payments help ensure compliance.
Some real estate brokers also provide crypto-to-fiat conversion services to facilitate this process, since real estate sales on the official registry must be in Canadian dollars.
Cryptocurrency users looking to buy real estate using digital coins should consult with tax advisors before starting the purchase process to avoid tax complications, as Canadian regulations take capital gains taxes on cryptocurrencies seriously.
Cryptocurrencies have the capacity to open up the notoriously illiquid real estate market. Enabling the purchase of crypto real estate not only diversifies payment channels, but also makes it easier for international cryptocurrency investors to acquire real estate assets around the world.