Cryptocurrency payments for Dubai real estate transactions are gaining traction
Would you buy a studio apartment in Dubai using cryptocurrency? Or invest in your dream villa using Bitcoins?
Many developers in Dubai are actually willing to accept cryptocurrency as a mode of payment. With these innovative modes of payment gaining popularity in Dubai real estate transactions, mortgages and cash are no longer the only ways you can purchase a home.
However, it is important to highlight one caveat: Property purchases in Dubai using cryptocurrency are in reality cash purchases at the core, since the cryptocurrency is actually converted into cash at a crypto exchange house prior to the transfer. This is because using cryptocurrency to purchase real estate in not yet officially permitted in the UAE.
Estimates suggest that using cryptocurrencies to buy residential properties generally occurs when their prices are at their peaks.
Using them is just as easy and convenient as using a home loan or cash to secure a deal. More and more developers in Dubai are now offering the option to pay through these novel methods.
When it comes to cryptocurrency payments for Dubai real estate, here are some key points to remember:
- Developers who accept the payment in Bitcoin or any other cryptocurrency, will always sign the sales and purchase agreement (SPA for short) in UAE Dirhams and receive actual cash. But they will run their own know-your-customer (KYC for short) programs and offer cryptocurrency as a payment mode via a third-party crypto broker.
- At present, no developer in Dubai can sign an SPA based on Bitcoin or any other cryptocurrency. That’s because the law of the land will first have to be modified to permit cryptocurrency as an official, direct means of payment. Only then cryptocurrencies will be able to become mainstream in real estate transactions. As of now, the UAE Central Bank doesn’t approve the use of virtual currencies as a mode of payment or for conducting online transactions. All this means is that currently the seller and buyer must go through a crypto-trading firm that’s licensed.
- There’s no regulatory activity in Dubai that limits the usage of cryptocurrency or regulates its oversight. For these reasons, even though Bitcoin and various other cryptos are gaining traction, they have a long way to go before they can become a direct, integral part of the Dubai real estate market.
Advantages of buying real estate with crypto
Once cryptocurrencies become a direct and mainstream mode of payment for real estate transactions, there will be several key advantages that will be unlocked. Here are the main ones:
- Reduced transaction costs
Bitcoin transactions tend to be cheaper because transaction costs are much lower compared to other traditional modes of payment. Most leading crypto exchanges allow free Bitcoin accounts and charge lower fees than conventional financial institutions for moving funds.
2. Quick and timely payments
Digital sales are convenient because they can be done almost instantaneously. You no longer need to worry about transferring money between foreign banks or about currency conversions. These things often slow down the process by days, even a few weeks.
3. Less paperwork
Last but not the least, buying real estate using cryptocurrencies involves less paperwork. The procedures are less time-consuming, hassle-free, and short.
Some words of advice
When paying through Bitcoin or any other cryptocurrency, it is important that you pick a reputable crypto trading firm. Make sure the firm you choose has previously executed crypto transactions. Also, ensure that the firm you pick is fully in compliance with the law of the land.
In addition to these things, cover all bases before you close the deal. This involves making sure the property you have chosen is being constructed by a genuine and reputable developer like Ellington Properties. Also, ensure all the paperwork is in order.
So, the key takeaway is…
The UAE law prevents cryptocurrencies from going mainstream as of now. They will have to be fine-tuned before cryptos can become a key part of real estate transactions in Dubai. The Central Bank of UAE at present prohibits using virtual currencies as a payment mode.
However, there’s a way out. And it involves using the services of a 3rd party operator. In fact, at present buyers and sellers use this workaround to get a real estate deal cleared and to make sure things are done in accordance with the law of the land. There are many such 3rd party crypto brokers in Dubai, and you can easily find one if you want.