Features of purchasing real estate in Dubai with bitcoins
- How to Buy Real Estate in Dubai with Cryptocurrency?
- Required Documents
- Which Developers Sell Real Estate for Cryptocurrency?
- What Types of Real Estate Can You Buy?
- Conclusion
Cryptocurrencies are increasingly penetrating all areas of our lives, spreading as a means of payment. Dubai has particularly excelled in this regard, where cryptocurrency is now being used for real estate transactions. One of the most significant deals that confirms this is the sale of a complex worth $180,000,000 by developer Emaar Properties.
Just a couple of years ago, not all Dubai developers accepted cryptocurrency as payment for real estate. Today, however, the majority of leading companies actively promote their projects that can be purchased with electronic currency. Moreover, real estate is one of the common ways to convert digital currency into tangible investments.
So, let’s discuss the key features of buying real estate with cryptocurrency, the acquisition process and how it is regulated by legislation.
A Brief Overview of Cryptocurrency
At the end of last year, experts estimated that there were over 10,000 different cryptocurrencies. The overall market capitalization of all cryptocurrencies at that time exceeded 94 trillion rubles, which speaks to their prospects, popularity and significance.
What is cryptocurrency? It is an electronic payment instrument based on a program code. The main characteristic of any cryptocurrency is the absence of external and internal factors that can influence transactions.
Cryptocurrency cannot be forged, its issuance is always limited and the processes cannot be monitored by participants of the banking system, legal entities, or tax authorities. Another advantage that speaks to the security of cryptocurrency is that transaction information and fund data are directly stored in the user’s wallet.
Cryptocurrency encompasses both coins and tokens, which differ in their principles of operation:
- Coin
In translation from English, it means «coin.» It is a cryptocurrency unit that serves as a medium of payment and is obtained through the computational power of a computer.
- Token
It serves as the primary driver within a specific project or network. Essentially, it can be referred to as a virtual payment system. Users can earn tokens through specific activities within the network or purchase them.
Therefore, cryptocurrency is a digital payment instrument based on special cryptographic technology. This technology utilizes code that is impossible to alter or hack. This is achieved through a decentralized database.
In recent years, Dubai has embraced the use of cryptocurrency for real estate transactions. While not all developers accepted it initially, the majority now actively promote projects that can be purchased using digital currencies. The secure and decentralized nature of cryptocurrencies provides an attractive option for buyers looking to invest in Dubai’s real estate market.
The Legality of Cryptocurrency in Dubai
Cryptocurrency is legal in Dubai. State regulation is applied to coordinate all processes and mechanisms, as well as to normalize the legal status of cryptocurrency usage. Two regulatory bodies, the Dubai Financial Services Authority (DFSA) and the Securities and Commodities Authority (SCA), are responsible for this.
These regulatory bodies have jurisdiction over a wide range of financial and investment activities, including credit services, the banking sector, asset management, commodity futures, international funds and insurance.
To ensure a precise understanding of the legal and investment status, the Dubai Financial Services Authority proposed a regulatory structure for tokens. This document became one of the prerequisites that allowed for discussions about the broad possibilities of cryptocurrency in Dubai.
Today, the legal status of cryptocurrencies in Dubai is officially established and supported by various government initiatives. This is further evidenced by the implementation of government blockchain projects. The main task of blockchain technology is to ensure the absolute protection of transmitted data. Furthermore, experts claim that the use of blockchain technology will save labor resources and time.
Many projects are being realized within the framework of a unified blockchain strategy proposed by Sheikh Mohammed bin Rashid Al Maktoum. According to his statements, the implementation of these projects will make Dubai an even more progressive and modern city with a developed economy, attracting more international investors.
Today, blockchain technology and the use of cryptocurrencies are actively integrated into the economy, which has an impact on the elimination of bureaucratic processes. For example, specialists from the Dubai Land Department are already working on creating a blockchain for the real estate sector, which will be used to establish a unified real estate registry.
Some of the most popular and in-demand blockchain initiatives in Dubai include:
- Smart Dubai
This is a global strategic initiative aimed at transforming Dubai into a true city of the future. The goal of this initiative is the widespread implementation of big data solutions, artificial intelligence systems and blockchain technology.
- Banking System
Dubai’s banks are also utilizing blockchain technology. It allows them to address several objectives simultaneously: minimizing the risk of fraud, ensuring a high level of customer protection and simplifying internal and external banking processes.
- Dubai Pay
This unique application operates under the supervision of the Dubai Smart Government. With its help, Dubai residents can pay for government services, saving time and the resources of specialists.
- Civil Aviation
One of the world’s largest airlines, Emirates Airlines, plans to implement blockchain technology for its own application. This will help reduce the level of fraud and make purchases as secure as possible.
- DP World
This international company specializes in shipping and logistics. The application of blockchain technology has significantly simplified internal and external processes, ensured a high level of document protection and made customer registration easier.
Overall, Dubai has embraced the legality and potential of cryptocurrency. With robust regulations in place and various government initiatives, the city is actively integrating blockchain technology and cryptocurrencies into its economy, paving the way for a more efficient and secure future.
How to Buy Real Estate in Dubai with Cryptocurrency?
Clients who have decided to use cryptocurrency for transactions with real estate sellers or landlords are recommended to turn to reliable companies that already have experience in dealing with digital currency. Firstly, the intermediary must have a special license issued by the Dubai Economic Department. Secondly, the company should have a good reputation.
For all real estate transactions, you can use almost any cryptocurrency — both the most well-known ones like Bitcoin or Ethereum and newer ones. It should be noted that the exchange rate of the digital currency against dirhams or dollars will be fixed at the time of the transaction. This, accordingly, may slightly adjust the final cost of the property: it can either increase or decrease. The commission will also be included in the final amount.
The process of buying does not involve any difficulties. The most important thing for the buyer is to have a cryptocurrency wallet. The wallet can be registered for both individuals and legal entities. Then the process involves choosing suitable real estate and negotiating with the seller regarding the terms of the transaction.
At this stage, the seller negotiates with the buyer on key parameters of the transaction, which will subsequently be documented in the purchase agreement. This includes fixing the value of the property in accordance with the current exchange rate. It should be noted that the amount stated in the agreement will not change and will not be subject to revision. Therefore, neither the buyer nor the seller will be responsible for any fluctuations in the exchange rate.
After that, the buyer transfers the specified amount in cryptocurrency to the seller’s wallet to cover the commission. Then the buyer receives a check from the seller, indicating the equivalent in dirhams. If the subject of the transaction is under-construction property, the check is issued for transfer to an escrow account. If it is a ready property, the check is made in the name of the owner.
If the seller is the developer himself, a special agreement is concluded, which specifies the transaction conditions taking into account the third party. Then the check is handed over to the developer and the buyer is notified that the amount for the purchase of a specific property has been transferred. When processing a ready property, the customer only needs to make payment for the selected property using the check. Then all processes for completing the transaction and obtaining the ownership certificate can be handled by an agent.
Please note the following: the purchase of real estate does not occur through direct payment. In this case, the requirement of the Central Bank is in effect, according to which any transactions in the UAE must be carried out in dirhams. Thus, the buyer transfers cryptocurrency to the seller’s account and in return receives a check for a certain amount, which is then used for payment.
If the fluctuations in the exchange rate are so significant that the transaction becomes economically disadvantageous for one of the parties, the purchase agreement can be terminated. In this case, the buyer undertakes to pay the intermediary’s commission, registration fee at the Land Department and the agent’s fee.
Required Documents
In general, the process of buying real estate with cryptocurrency does not differ much from a conventional transaction. To complete the transaction, a preliminary agreement is required, drawn up either in Arabic or English.
To avoid problems and errors during filling out the documents, it is recommended to consult an experienced specialist who will fill out the agreement and prepare the necessary documents. Another challenge is the specific terminology used in the Dubai real estate sector. Seeking the assistance of a specialist will help save time that would otherwise be spent studying this terminology.
The following documents are required to conclude a real estate purchase transaction with cryptocurrency:
- Passport;
- ID (proof of identity);
- Proof of address where the buyer resides;
- Contact details;
- If represented by a representative, a power of attorney granting them the authority to act on behalf of the buyer.
Please note that when using cryptocurrency, confirmation of the legality and legitimacy of obtaining digital assets may be required.
Which Developers Sell Real Estate for Cryptocurrency?
In Dubai, there are quite a few companies specializing in the sale of real estate for cryptocurrency. Among the largest developers, DAMAC Properties, Emaar Properties, MAG Development, Meraas and Dubai Properties stand out.
To ensure the legality of the transaction and protect the buyer, it is advisable to collaborate exclusively with real estate agencies that have an official license and experience in selling properties for cryptocurrency.
What Types of Real Estate Can You Buy?
Cryptocurrency has firmly entered the real estate sector in Dubai, leading to a rapid increase in the number of offerings that attract international investors. Typically, cryptocurrency is accepted as payment for off-plan properties.
Today, you can purchase the following properties with cryptocurrency:
One of the flagship projects being developed by Emaar Properties. This developer also offers properties for cryptocurrency in projects such as Grand Bleu Tower, Marina Vista and Beach Isle. Another attractive offer includes luxury residences located on the Persian Gulf coastline. The key distinguishing feature of properties from this developer is the top-notch amenities available both within the residential complexes and in the surrounding areas.
An elite residential complex that has gained popularity among affluent citizens. The project is located on Jumeirah Bay Island and includes penthouses and luxury apartments. The distinctive features of this project include panoramic windows, landscaped pools, 24/7 security and a host of other amenities that enhance the residents’ quality of life.
This project has been highly anticipated and is considered a luxurious residential complex by DAMAC Properties, featuring unique interior designs crafted by renowned fashion house Roberto Cavalli. This distinctive 70-story tower is located in the upscale Dubai Marina area and will house a total of 480 apartments.
Conclusion
Today, Dubai is considered one of the most promising cities for purchasing real estate with cryptocurrency. It is worth noting that the largest cryptocurrency transaction took place in 2019 when a property worth 180 million dollars was acquired.
Many developers in Dubai accept cryptocurrency as payment for real estate. Furthermore, potential buyers can choose from various projects that meet their requirements.
It is important to remember that when engaging in such transactions, it is advisable to approach a reliable company specializing in real estate selection and having experience in managing cryptocurrency transactions.
