Cryptocurrency and Its Future in Dubai Real Estate
As per the latest research of top real estate developers in dubai, real estate transactions are carried out using cryptocurrency, especially in the real estate markets of Dubai and other destinations of the UAE. There have been a lot of speculations since last year on the future of cryptocurrency in Dubai real estate. Is it just a temporary payment method as an experiment or it will turn into the permanent mode of payment for the upcoming projects in the city?
Cryptocurrency and Real Estate Market of Dubai
In this blog, we have discussed the strengthening relation of cryptocurrency and real estate in Dubai and how different renowned firms have reacted to the idea of investing cryptocurrency for buying properties across the UAE.
If you are looking for best property investment in dubai and want to know how bitcoins work in buying properties in Dubai, you must know about cryptocurrency in detail. Let’s get started.
Introduction to Cryptocurrency
Cryptocurrency is code-based money or currency, an encrypted string of data that refers to a single unit of the currency, such as Bitcoin or BTC. The overall cryptocurrency economy is overseen by protocols of peers. Some of the most popular cryptocurrencies are Bitcoin, Ethereum, Libra and Ripple. This is not the end to the count, in fact, there is a lot more to be named.
Before you can use cryptocurrencies for best property investment in dubai or other investment purposes, you should have an online wallet to send and receive your choice of cryptocurrency. The transactions made are secured by cryptography, ensuring your balances are safe.
Advantages of Using Cryptocurrency
- Easy Setup and Working Process: creating a wallet is a matter of a few minutes.
- Anonymous: Cryptocurrency usage is 100% anonymous.
- No Transaction Fees: You will not be charged by any transaction fees for using cryptocurrency for investment purposes.
- Faster Transactions: When you make transactions using cryptocurrency, it is faster than regular banking.
Disadvantages of Using Cryptocurrency
- Security Issues: Your wallet can be hacked and currency can be stolen.
- Price Fluctuation: the prices of cryptocurrencies fluctuate a lot.
Using Cryptocurrencies for Buying Real Estate in the UAE
The interest of using cryptocurrency for buying properties in the cities of UAE, especially Dubai is not just limited to the top real estate developers in dubai, but also the government of the UAE. However, the process has been encountering a lot of ups and downs as not all the firms accept it as a good idea of doing a property-related transaction, However, there is a ray of hope that cryptocurrency can be the future of Dubai real estate.
To discuss it in detail, we have got the views of different popular and emerging real estate firms on the idea of including cryptocurrency into their respective payment methods.
Emaar Properties and Its Mixed Reviews
The top real estate developers in Dubai and a popular name across the country and world, Emaar Properties are responsible for the world-renowned buildings like the Burj Khalifa and Dubai Mall, to name a few. Earlier in 2019, the company made a statement saying it is not ready to accept cryptocurrencies as a payment mode and about continuing to have transactions in US Dollars and UAE Dirhams.
However, there was a rumor circulating around that Emaar allows its clientele to pay using Ether and Bitcoin for the properties they buy. They never backed or discarded the rumor, giving rise to mixed opinions on the use of cryptocurrency.
After a lot of speculations, Emaar, by the end of 2019 declared that it is ready to launch its own blockchain loyalty token, named EMR. It also stated that the loyal Emmar customer will receive these tokens as appreciation for their long-term bond and loyalty or as a business referrals reward. The customers can use EMR to buy real estate, purchase items at retail outlets or finance a stay in a hotel.
Moreover, the customers can also use these tokens to trade with other users. The main objective behind this declaration is to engage in modern digital-native and mobile-first generation, potentially boosting sales in the future.
Fam and Huobi Properties Also Joined In
Around mid-January 2020, Huobi Properties, a digital asset exchange provider based in Singapore, announced its partnership with a leading real estate company in the UAE, Fam Properties. Fam Properties was awarded for recording 10 billion AED of total sales in the last 10 years by DLD (Dubai Land Department).
The partnership between the two suggests that clients can use the popular cryptocurrencies to make payments such as Bitcoin (BTC), Ethereum (ETH), Ripple (XRP) and a few more. For this partnership, Huobi also offered Fam the opportunity to convert these cryptocurrencies into fiat currencies such as UAE Dirhams, US Dollars, British Pounds, Euros and others. Huobi gets its license from DMCC, which means that the transactions are completely secure, safe and in compliance with the rules and regulations.
Both the parties combinedly stated that the cryptocurrency payment mode for real estate investors will possibly improve the market stability and boost liquidity. According to the predictions made by Huobi, the institutional investors and individual millionaires will contribute to fueling the growth of cryptocurrency this year.
Arms & McGregor Partnered with Bloom Technology
With an intention to attract property investors for the best property investment in dubai from the regions of South Korea, Arms & Gregor, a popular real estate firm in Dubai partnered with Bloom Technology. From the beginning of 2020, Arms & Mc Gregor’s customers have been allowed to purchase properties using cryptocurrency. This partnership with Bloom Technology, the South Korean blockchain company allows property investors in the UAE to pay using a cryptocurrency issued by Bloom, Locus Token.
As per the predictions made at the time of declaring their partnership, this step would attract more than 1000 property investors from South Korea. The predictions were made on the basis of the fact that digital payments increase transparency and are free of remittance charges. This partnership between the fin-tech and prop-tech companies allows technological advancements for transactions to take place by using a digital platform.
Aston Plaza Sale on Hold
The first project to allow investors to pay through cryptocurrency was Aston Plaza, launched in 2017 in Dubai. The building/complex of Aston Plaza has a total of 1300 apartments, out of which, 150 units were decided to be sold in Bitcoin. At the time when this was reported, a 1- bedroom apartment was tagged to be sold for 15BTC and a 2-bedroom apartment charged investors 45 BTC. The project launched successfully and as it reached 25% completion of the total construction, it stopped.
According to the inspections carried out by Government, it is noted that the construction came to a halt and is nowhere to be started anytime soon, especially considering this Covid-19 phase. The original handover date was August 2019, which is now almost a year-old news. The site is still seen online, but most investors do not believe it would ever be completed and they will get their apartments for which they invested their cryptocurrency.
The Future of Cryptocurrency in Dubai and the UAE
Even though a project in Dubai is at a halt for years now, the use of cryptocurrency is growing on a global scale. And, this growth is giving hope to all the buyers and sellers in the destinations that are considered real-estate hubs, like Dubai. However, mainstream acceptance of this trend will still take time, regardless of the lightning speed of technological advancements. This is because updating legal and regulatory frameworks is moving at a slower pace.
Of all the cities or major countries having powerful and global real estate markets, Dubai has always been a trendsetter. It is among the first countries to start cryptocurrency transactions in the real estate industry. We need to wait and watch how the introduction of crypto changes the face of real estate of UAE in the future.