Picture Credit score: Pixabay
Money and mortgages needn’t be the one manner you purchase a house in Dubai. When you have stocked up on Bitcoins, and their costs occur to be flying excessive in the meanwhile, that’s all it’s good to pay for the deal.
That is precisely how extra patrons are financing their purchases in in Dubai.
“Typically, exchanging cryptocurrencies to acquire properties often happens during peak bitcoin prices,” stated Firas Al Msaddi, CEO of fam Properties.
And it’s as simple as utilizing cash or a bank loan to get the keys to the house. Al Msaddi says that builders in Dubai are keen to supply patrons the choice so as to add Bitcoin to that blend.
“The way it works is that the developers who accept Bitcoin sign the SPA (sale and purchase agreement) based in Dirhams only,” he added.
“Nonetheless, they run their very own KYC (know-your-customer) programmes and work with patrons to engineer the construction of the transaction in a manner that works for each events.
“As issues stand now, no developer indicators SPAs based mostly on Bitcoin. It’s a lot to do with accepting the method and the channel wherein the cost could be made to builders.
“It is still very limited… but it is growing as the legal framework around it is maturing in the UAE. I’ve only heard of Bitcoin as it is the main crypto currency.”
When to take out these Bitcoins?
Cryptocurrencies have been round for a while, with Bitcoin being the preferred one. And as has been extensively commented upon, there was a interval final 12 months when everybody gave the impression to be piling into Bitcoins and jacking up the value. It was as if this crypto was on its solution to be the brand new gold normal of those instances.
However then gravity intervened and Bitcoin costs had been introduced right down to Earth. Now, after a protracted interval, these are beginning to inch greater. Sufficient for property patrons to as soon as once more begin utilizing them to choose up an residence, a villa, and in some circumstances, a whole constructing.
“We executed one bulk transaction – but not for a tower – via Bitcoin payments,” stated Al Msaddi. “Yes, both developer and investor have to agree on every step of the (payment) way.”
Bitcoin’s swoon and achieve
“In the last three- to four-month period, Bitcoin prices have had a wild swing with volatility,” stated Vijay Valecha, Chief Funding Officer at Century Monetary. “Trying on the absolute vary, over this era, Bitcoin had a excessive of $9,600 (Dh35,260) and a low of $6,425 (Dh23,598).
“As such, exchanges have seen good trading interest over the last quarter.”
What the UAE legislation says?
Earlier than cryptocurrencies go mainstream, the legal guidelines of the land and security measures will want tremendous tuning. The UAE Central Bank presently prohibits use of digital currencies to conduct on-line transactions or as a mode of cost.
A manner out can be for each events to go by way of a licensed third-party operator to get the deal cleared, and make sure that all transactions are finished consistent with UAE legal guidelines. There are already such crypto buying and selling companies working below Dubai and Abu Dhabi jurisdictions. (Consider them as doing the position of property brokers in a standard property buy.)
That is how actual property offers involving Bitcoin have been structured within the current previous.
“In December last, it was said that the UAE Central Bank does not approve of any virtual currency and has not granted licence to any financial organisation to facilitate crypto currency transaction processing,” stated Valecha.
However, on the similar time, the Securities & Commodities Authority, the UAE regulator, has printed draft rules for crypto asset buying and selling. “Very recently, it sought public feedback on regulation in this space, and in early 2019, the UAE government and Saudi Arabia announced an agreement to cooperate on the creation of a crypto currency to better understand the implications of blockchain technology as well as facilitate cross-border payments,” Valecha added.
Dubai property runs the trials

Picture Credit score: Gulf Information archives
As and when the legal guidelines are in place, Dubai’s actual property market would have seen its fair proportion of Bitcoin led transactions.
In November, Ellington Properties confirmed it had chosen Bitcoin Suisse (BTCS) as its most popular crypto brokerage supplier, “adding to the payment options for its base of international customers,” the corporate stated on the time.
Clients should purchase houses utilizing Bitcoin with the transaction course of facilitated by Bitcoin Suisse.
However with something crypto, don’t try to fast-track the method. And don’t crimp on the due diligence.
A phrase of recommendation
“Deal with reputable companies that have already executed transactions in Bitcoin payments,” stated Al Msaddi. “Selecting each occasion concerned within the strategy of promoting based mostly on Bitcoins could be very crucial to the protection of the transaction – for each purchaser and vendor.
“Qualifying each occasion concerned within the course of is essential. At fam Properties, we undergo a well-tested qualifying course of earlier than choosing the proper crypto firm to work for.
“Our main criteria is choosing a company that is fully in compliance with the UAE laws.” Final month, fam tied up with Huobi, licensed by DMCC, to supply safe crypto cost choices for its actual property traders.
Rule of thumb to recollect
In any property funding, the golden rule is {that a} purchaser ought to have lined all bases earlier than closing it. It turns into much more of a necessity when a property is being financed via Bitcoin.
A guidelines would contain figuring out whether or not the property in query is being constructed by a reputed developer. And whether or not all of the paper work associated to it are so as.
Now, with crypto concerned, the client and vendor might want to undergo a licensed crypto buying and selling agency. Get that bit unsuitable, or the client and vendor attempt to reduce corners, then issues may get messy.
UAE takes to the cryptocurrency world in gradual steps
With use of digital forex prohibited for transactional goal, traders and merchants could make use of licensed crypto exchanges for buying and selling goal. This contains names like Bit Oasis, Digital Property Alternate & Matrix Alternate. Some have the preliminary approvals whereas others are on the verge of receiving a full-fledged crypto license.
In September final, the Nationwide Bank of Fujairah (NBF) joined the worldwide “blockchain” based mostly commerce finance community Marco Polo. Launched in 2017, the community brings collectively main monetary and know-how giants, together with Mastercard, Natwest, Microsoft, Oracle and Bank of America.
Additionally, final 12 months, Dubai Chamber of Commerce introduced a partnership with Emirates NBD to drive progress of the “Dubai 10X” initiative, which hopes to digitalise the commerce transactions in what is named the “Digital Silk Street”.