Digital currency has long been thought to be useful to only a highly niche crowd, with people outside this “inner circle” having little say and getting virtually zero benefit from tokens like Bitcoin and Ethereum.
However, times have changed, and the influence of digital currency and blockchain are starting to be felt in waves across the globe—disrupting various industries with its unique and practical properties.
From healthcare to technology, digital currency and its use cases have helped optimize functions within various fields. One industry that has harnessed digital currency’s exponential potential to a high capacity is the real estate industry.
The real estate industry is often bogged down by long payment and transfer processes, exorbitant middleman fees, difficult cross-border transactions, and slow liquidity. These problems riddle the real estate buying process, which is neither desirable for the consumer nor the seller.
Digital currency addresses these issues directly, providing an alternative way for companies and individuals to buy real estate. Besides the additional payment option, blockchain technology and its secure and transparent properties also help support the house-buying process, making it easier and more streamlined.
With many houses and properties around the world being bought through digital currency in 2024, there’s an undeniable paradigm shift that’s putting digital currency at the forefront and making it a viable payment method that’s accepted across the globe.
So to answer the question, yes, the real estate industry is changing—and for the better—thanks to digital currency. Let’s look at the good that this digital asset class has brought and is continuing to bring to this space in more detail.
It Provides an Alternate Payment Method
While bank transfers, cheques, and cash payments are some of the most common ways to pay for the downpayment of a property, digital currency is a growing alternative payment solution that can give people another means to pay for their lot.
Bitcoin and Ethereum are recognized as viable payment options across many countries, from Spain to Thailand. Developers, individual sellers, and real estate brokers may accept the payment of property with digital currency if it’s in accordance with their terms. Some marketplaces even specialize in listing properties sold in digital currency only—showing the appeal of this payment method for real estate properties.
The ability to pay a real, tangible asset like property with digital currency goes to show that this token is a legitimate and stable digital asset.
It allows sellers to cast a wider net and entice digital currency-holding buyers to transact with them since transacting directly with digital currency helps them avoid the delays associated with buying with fiat currency.
Enables Borderless Transactions
The value of Bitcoin, Ethereum, and stablecoins constantly change, but they hold the same value regardless of one’s present location. This makes it the perfect currency to use for cross-border transactions, particularly among parties who use two different fiat currencies.
Making a property purchase with digital currency is ideal because its value remains constant across borders. It doesn’t need to be converted nor does the buyer need to spend extra for a conversion fee, as the only fees you’ll be paying are small and negligible transaction fees.
For instance, if an Australian citizen wants to buy a summer house overseas, they can consider transacting using a stablecoin like USDC or through Bitcoin purchased from Bitcoin Australia or other exchanges. This is assuming that the seller is willing to accept digital currency as a payment method.
Furthermore, this lack of a border means that money can be transferred at a much quicker pace than they would otherwise would if they’ve gone through an intermediary like a bank. This streamlines the purchasing process, enabling a quicker rate of transaction and happier parties on both sides.
Faster Transactions Due to Blockchain Security
Purchasing real estate with fiat or on credit can be long and complicated due to the involvement of multiple parties, a good number of which do nothing more than help check and balance the transaction.
This isn’t only time-consuming, but it can also cost you hundreds to thousands of dollars more on top of the original price.
By buying property with digital currency, you remove the need of getting multiple intermediaries like central banks to help facilitate the transaction.
Instead, you get to directly conduct the transaction with the buyer or seller. This is because you’ll be entering a payment agreement facilitated by the blockchain—an ecosystem that has its own security measures in place.
These security measures, such as immutable ledger of payment, are automatically applied to each transaction, granting protection to each party, particularly in liabilities and title ownership.
This cuts down the steps it takes to securely buy a piece of property, making the buying process much more efficient.
Transparent Purchasing Process
The immutable ledger found in the blockchain can be accessed not only by the parties involved, but by the public as well. It’s also impossible to tamper with these records once a transaction has been made, as each transaction comes with its own hash attached to it.
This makes it less likely for people to commit fraud, particularly if their identity is made known to the other party beforehand. It also clears up the record and timelines of payments, making title management and property ownership transparent from the start.
These factors help make property buying with digital currency safe and secure, contrary to popular belief and the stigma surrounding digital currency. This sense of safety is compounded when the parties do their due diligence and know the client or seller’s reputation and identity leading up to the transaction.
Enforceability of Smart Contracts
One of the biggest game changers in the world of real estate investing is the introduction of smart contracts. This contract is a set of code that executes a pre-set action once a specific condition has been fulfilled.
In the context of real estate, smart contracts can be used to streamline activities like property transfer and making the closing sale. These actions get streamlined because there’ll be no more downtime between one dependent action when one independent action is fulfilled. In turn, this makes dealing with buyers and sellers more efficient and streamlined.
Besides the increased efficiency, smart contracts also perform roles typically performed by lawyers and brokers. While this blockchain smart contract can’t fully replace these roles, it helps buyers rely on them less to support their transactions. This can, in turn, reduce the total cost of securing and purchasing the property.
Allows Consumers to Invest in Shares of Property
One of the biggest hardships of owning real estate is selling it. With its naturally high price point, the number of possible buyers are drastically cut down. It’s not uncommon for properties to remain unsold for months, if not years, due to interested prospects being unable to afford the value of the property.
For developers of big projects, this can result in a massive loss in their investment. However, there’s one way that these developers can earn money from potential real estate investors, even if they don’t have the capital to pay for your property in full. This solution is called a REIT.
Real estate investment trusts (REITs) are a form of investment that allows investors to purchase a share of a piece of real estate. This real estate can either be residential units or commercial buildings.
REITs are similar to stocks and digital currency in that it’s a passive income source. Unlike digital currency, however, it may pay dividends. But like digital currency, its capital and portfolio value can appreciate.
It’s very possible for digital currency holders to invest in REIT using a digital currency of their choice, whether it’s through Bitcoin, Ethereum, a stablecoin, or even some altcoins. This legitimizes digital currency as a source of currency while simultaneously allowing holders to potentially grow their digital assets through this investment vehicle.
Continuous Government Regulations to Make Digital Currencies More Accepted
One thing that’s holding back mainstream adoption of digital currency is its unregulated nature.
Doing something like sending to the wrong wallet address is something that you’ll have to deal with largely on your own—and this is just the tip of the iceberg when it comes to bad things that can sprout through digital currency transactions gone wrong.
Fortunately, government agencies throughout the world are starting to regulate digital currency transactions in a more rigid light. These regulations punish people intending to defraud, deceive, or steal from digital currency holders.
For instance, in Australia, legislators are soon to pass a bill that’ll require digital currency exchanges to obtain a permit to operate from the Australian Securities and Investments Commission or ASIC.
This move can spearhead mainstream adoption and lead to the wider acceptance of digital currency in daily life—including making real estate transactions.
