The Rise of Crypto in Real Estate

Realty Force is moving with the times and is saying this, we’re saying we have fully integrated the crypto platform for transacting, across many of our deals.

We covered a lot of crypto transactions successfully. We supported a lot of buyers via third-party operators to purchase their dream homes with crypto or invest in properties using this increasingly popular platform. These buyers choose not to go through the banking channel, but rather avail of a quick and easy transaction, so blockchain comes in as a most viable option, especially since Dubai has fully regulated all digital assets through the VARA.

The new VARA establishment is a step forward for Dubai with a guaranteed positive impact on the property market. It signifies the growth of the digital sector in the UAE, propelling the country as one of the leaders in the worldwide adoption and regulation of digital assets. Digital transformation and digital asset regulation bring many advantages across many sectors, securing safety for investors, the Central Bank of the UAE, and the Securities and Commodities Authority. Furthermore, it regulates and innovates the industry in a more accountable manner for crypto transacting.

Realty Force has so far transacted four deals via crypto transfers. Creek Side 18, Palace in Creek, then we did Emaar Beachfront Sunrise Bay where the entire amount of AED 6.3 million was cleared via crypto and then the investor converted it via manager’s cheque. Park Ridge was another example of a crypto transaction we successfully facilitated.

Riyaz got into the crypto space in 2020 when he sold a property to an Indian National based in Columbia. He then got introduced to two other friends from the same circle, one from Puerto Rico and the other from Mexico. They also ended up making investments in real estate with Riyaz, via crypto. This was operated through a third party that accepts and regulates this type of transaction through a manager’s cheque, on behalf of our clients, and with whom we have been able to maintain and cultivate a fruitful partnership all throughout 2021. This third party is based in Switzerland with a branch operating in Boulevard Plaza, Downtown Dubai. It is safe to say, 40% of our transactions were crypto-based or resulted in half crypto-based payments, and half cash payments for the respective deals. The virtual currency used was bitcoin, and it has grown into a common trend lately with other master developers in Dubai following suit and operating crypto-based deals. Nakheel and Emaar are prevalent examples. Nakheel has facilitated this type of transaction recently for their Diamond Club members, which we proudly became part of, thanks to our impressive sales track record with Nakheel. Dubai has become very pro-crypto, a strong indicator being that Binance has set up quarters in the emirate, is also setting up quarters in UAE, and we can surely expect to see more enterprises streaming on the UAE market, slightly pushing banks to the side, to give way to crypto transactions.

Today, Bitcoin is trading at premium rates in certain countries. Currently, DLD and the government of Dubai have yet to accept Bitcoin as a legal tender officially, but they are pro-crypto in the sense that they accept a third party being a facilitator for someone who has crypto and wishes to make the payments, so they act like a payment gateway and issue a manager’s cheque, ensuring an easy flow of transfer, for a small fee.

VARA will govern a wide range of activities including clearing and settlement services for virtual assets, management services, as well as classifying types of virtual assets.

  • The exchange services between various virtual assets and currencies, be it national or international
  • Issuing permits and supervision of digital transactions
  • Regulating and monitoring the release of virtual assets and NFTs
  • Data protection of users and beneficiaries
  • Prevention of price manipulation for virtual assets
  • Storage services for virtual assets

Secondly, individual investors are looking to open up accounts on crypto platforms and transfer through various banks that are embracing this kind of transactions via currencies such as Fiat currency, which includes Dollars, Dirhams, Pounds, Euros, strengthening crypto’s place on the market. Countries in South America, such as El Salvador, Argentina, and now UAE are getting more proactive in facilitating investment and ownership for people via crypto. The current Russian-Ukrainian conflict has left many unable to park their assets and move money around, due to the severe sanctions imposed by the world.  Therefore, bitcoin remains the most viable platform for them to move cash around, due to the decentralized exchange and UAE’s pro crypto approach.

In the coming months, we will be witnessing many ways in which the blockchain will impact real estate in beneficial ways, offering new legit means for buyers and sellers to connect, as well as enabling trading platforms and online markets to offer support more comprehensively for property transactions.

Nonetheless, in the real world of Real Estate, the support, knowledge, impartial advice and dedication of our Realty Force Real Estate professionals remains crucial and indispensable to buyers, sellers and investors.

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