Role of Crypto Currency in Dubai Real Estate

With the outbreak of the COVID-19, various industries are drawing in debt while many of them are rising. Cryptocurrency is one of the things that are high in demand, yet some people have so many concerns about it. People are divided between making it the official currency while others struggle to accept it as a currency. However, if we talk about the real estate industry in Dubai, they have faced some fallback issues during the pandemic where managing finances opened up a few minds to use cryptocurrency for trading.  

Benefits of Using Cryptocurrency for Real estate investments

Before diving into the official matters of cryptocurrency, let’s talk about the benefits of it:

• When compared to other modes of transaction, Bitcoins appear to be less expensive when purchasing real estate because it eliminates the need for third parties. It saves the investor a lot of money because there are no fees involved.
• The simple and quick transactions make it simple to complete the entire process in a short amount of time.
• Paying with cryptocurrencies is more flexible and efficient from a technical standpoint.
• When purchasing a property with cryptocurrency, task usually entails determining the price in FIAT currency and then converting it to Bitcoin. There is no risk, and both the seller and the investor stand to benefit greatly.

Seems beneficial, right? But what do the government and regulators of the UAE have to say about it?

Cryptocurrency purchasing of property is not as easy as one could imagine, especially given that the UAE doesn't have a legal tender for cryptocurrencies.

The Central Bank of the United Arab Emirates has issued cryptocurrency guidance, stating that it is not “currently accepting [or acknowledging] crypto assets or virtual assets as legal tender in the UAE.” In December, the regulator declared that "the UAE dirham is the only legal tender."

What must you expect for the future?

On the other hand, cryptocurrency is a new concept, and it will take some time for banks to warm up to it. Jurisdictions such as ADGM and DIFC are issuing crypto regulations, and the central bank launched a virtual asset system last year. With the participation of international organizations, it is only a matter of time before virtual currency and blockchain technologies become commonplace.

Where does the industry stand right now on using crypto for the property?

However, the industry itself is in a division right now. We observed the conflict when a heated argument took place at the event of Samana Developers. As Khaleej Time Reports:

Atif Rahman, director, and partner of Danube Properties said, “There is no regulation, and there is a high risk of devaluation as a result of fluctuation. It's difficult to see how it fits into the real estate industry, especially when it comes to off-plan properties. The law of the land mandates that funds be transferred through an escrow account, which, to my knowledge, does not support cryptocurrency.”

“I believe that cryptocurrency should be considered as a mainstream payment method in the real estate market because it introduces a new segment of buyers to us,” said Farooq Syed, CEO of Springfield Properties. The property seller will bear the risk, and if they are willing to accept cryptocurrency as payment, he/she should be allowed to do so. When buying directly from developers, the risk falls on the developers who wish to accept cryptocurrency, putting Dubai's burgeoning real estate market on the radar of these crypto billionaires from around the world.”

Bottom Line

The majority of the top real estate firms now accept Bitcoin payments. This is great news for investors looking to diversify their portfolios by purchasing properties in Dubai. This will re-energize the sluggish market and give developers more leeway to come up with specific plans. The message on the board is clear: it's time for real estate to change, and the only way to do so is for all of the major stakeholders to come forward and work out a viable solution.