Can You Buy Property in Dubai with Cryptocurrency?
Real estate development companies are becoming more widely acknowledged using cryptocurrencies to pay for real estate in Dubai and other emirates. Is this a marketing gimmick, or is this the future financing model for new developments in Dubai?
What Do We mean by Cryptocurrency and How Does it Work?
It is critical to understand how these tokens function before utilizing cryptocurrencies to purchase real estate or other financial objectives. The term Cryptocurrency refers to a form of digital currency. This implies that one unit of currency, for example, one Bitcoin (BTC) is represented as a data string. A peer-to-peer protocol watches the whole currency as a precaution. Today, there are hundreds of cryptocurrencies, with Bitcoin, Ripple, Ethereum, and Libra being just a handful of the most prominent. To utilize a cryptocurrency, a person or business must first open an online crypto wallet to transfer and receive tokens. Cryptography safeguards transactions and balances.
- Creating a wallet is quick and straightforward.
- Cryptocurrencies are decentralized and anonymous.
- There are no transaction costs.
- Transactions are completed more quickly than in the traditional banking system.
- Hackers may take your money and tokens.
- Cryptocurrencies are prone to enormous volatility.
- A small number of shops accept cryptocurrencies.
- Increasing the number of laws and regulations governing cryptocurrencies may have a detrimental effect.
How can You use cryptocurrency to purchase an apartment in Dubai?
The UAE government and the country’s top real estate development businesses see cryptocurrencies as the payment mechanism of the future. However, we still have a long road ahead of us, complete with potholes. At the same time, technology advances at the speed of light, and there are several more factors to consider when using cryptocurrencies in the real estate industry. The following summarises some of the most significant crypto developments in Dubai and around the UAE during the last year.
Emaar Properties is not a crypto-accepting company, or is it?
One can count Emaar Properties, a real estate heavyweight, as a name that is unparalleled for its work in the Middle East. It is renowned globally for unique constructions like the Burj Khalifa and the Dubai Mall; it has also earned the tag of being one of the UAE’s top firms in the real estate domain. The company’s official statement indicates that it does not accept bitcoin as payment for its real estate projects. According to the firm, the bulk of its transactions are conducted in US Dollars or UAE Dirhams. However, an investigation into the company’s record of transactions reveals that Emaar does take cryptocurrencies such as Bitcoin and Ether in exchange for its real estate.
Emaar revealed intentions to create its blockchain loyalty token, the EMR, in 2019. The tokens are distributed to the company’s clients and business partners as a gesture of appreciation for their loyalty. They may, however, be given in exchange for company recommendations. Customers can use EMR to pay for lodging (such as hotels), retail purchases, and real estate. Simultaneously, the tokens may be swapped with other EMR users. Managing your EMRs is done with the use of dedicated software that is available for both Android and iOS. The ultimate aim of launching EMR is to grow sales by engaging the contemporary digital-native, mobile-first generation.
The first development sold in Bitcoin ($325 million)
The Aston Plaza in Dubai was the first property to allow investors and purchasers to pay with Bitcoin when it opened in 2017. A total of 150 pieces were earmarked to be sold only in Bitcoin out of a total of 1,300. At the time, a one-bedroom apartment cost 15 Bitcoins, while a two-bedroom unit cost 45 Bitcoins. The project was successfully launched, and the construction process has progressed to approximately 25%. And that is where it stopped. Government checks have revealed that development has ceased and the site has been dormant for years. Additionally, the intended August 2019 handover date has been missed. Although the Aston Plaza website is still active, it is improbable that the building will ever be built, and investors would receive an apartment in exchange for their BTC investments.
Huobi and Fäm Properties have formed a joint venture
Huobi, a Singapore-based digital asset exchange, announced a partnership with Fäm Properties, one of the leading brokerage companies in the UAE, in mid-January 2020. The latter was recently recognized by the Dubai Land Department (DLD) for achieving a total sales value of ten billion AED over the last decade. Through the collaboration of the two businesses, Fäm Properties can now accept payments in some of the most popular cryptocurrencies accessible today, including Bitcoin, Ethereum, Ripple, and three more tokens. Huobi’s role is to convert the cryptocurrencies received by Fäm Properties into fiat currencies such as Euros, US Dollars, British Pounds, and UAE Dirhams. Huobi transactions are secure and safe, and they adhere to all applicable rules and regulations since the firm is DMCC-licensed.
The firms asserted in a joint statement that introducing these additional payment options will boost market stability and liquidity.
Arms & McGregor and Bloom Technology form a partnership to attract property investors from South Korea to the UAE
Arms & McGregor, a Dubai-based real estate business, has started accepting cryptocurrency payments for new villas and apartments in the UAE since 2020. The firm partnered with Bloom Technology, a South Korean blockchain startup. Customers may now pay for real estate with the Locus Token, a cryptocurrency issued by Bloom Technology. Payments made digitally using this cryptocurrency are free of remittance fees, which is expected to enhance transparency. Both firms anticipate that the cooperation will attract around 1,000 real estate investors from South Korea. Integration of digital platforms is intended to expand the potential for technical improvements in transactions.
Is Cryptocurrency the Future of Real Estate in the United Arab Emirates?
The appeal of Cryptocurrencies is growing worldwide at a breakneck pace, transforming a broad variety of sectors, including real estate. While technical advancements enable crypto to be utilized for quick and secure transactions, updating legal and regulatory frameworks will take years. This, in turn, will restrict the currency’s widespread use. Dubai, which has always been at the forefront of global real estate growth, aspires to be a pioneer in using cryptocurrencies in the real estate sector.