The Cayman Islands is home to prestigious properties and some of the most high-wealth individuals in the world. So, it makes sense that the real estate market would be at the forefront of the burgeoning cryptocurrency market.
Worldwide, purchasing a property with cryptocurrency it still in its infancy, however there is growing demand among buyers and sellers for transactions that use a digital currency such as Bitcoin or Ethereum.
In Cayman, some sellers are signaling to us that they will accept cryptocurrency as payment for their property. As greater numbers of sellers and their vendors choose this path in the future, it will become increasingly common and the sense of apprehension that buyers and banks may have now may disappear, driven by mass adoption and a better understanding of the nature of cryptocurrency.
We asked Darrel Hines, CEO of Ronco Metrics in the Cayman Islands, for his opinion on the topic. He said once institutions and the general public as a whole start to understand, accept and embrace the true viability of blockchain and cryptocurrency, it will become a dominant form of payment, across all industries.
There are thousands of digital currencies available and in circulation — of which Bitcoin is the most commonly known — and as interest grows among consumers, using cryptocurrency as a form of payment for real-estate will become a norm rather than the exception. There are many examples today of the disruptive nature of blockchain in the real estate space such as the automation of some of the legal aspects of a sale and transfer of property, eliminating much of the need for escrow and legal services. At the moment, however, the majority of real-estate transactions in which cryptocurrency has been used are confined to the high-end of the market and the use of blockchain in the commercial real estate arena.
A handful of properties around the world — in New York, in Australia, and the UK — that have accepted cryptocurrency as a form of payment, whether in full or part, have made global headlines.
So, whether or not this is possible locally in the Cayman Islands, what does one need to keep in mind when looking to sell or purchase a home with a cryptocurrency?
Both parties must agree that the sale will be part or in whole completed via cryptocurrency. Both parties understand the volatility of the markets and the timing of the close as that translates to the value of the crypto payment at the time of the close. Ensure there is a service that allows for the conversion of any payment back in to FIAT (i.e. USD) should that be the end game. For example, the buyer may have Bitcoin and the seller may want USD. The process must allow for either the seller to cash out before the sale in which case, the sale is completed in FIAT, or the buyer has access to convert (with applicable fees) the cryptocurrency back in FIAT based on an ‘Over the Counter’ trade with a broker or crypto service.
There are also a number of intricacies involved in the transaction, namely around having the proper legal support and property vendor who are familiar with the technology. Any lawyer or real estate agent must have an understanding of the processes involved, any legal framework, and an understanding of the technology that underpins the whole transaction.
Our Sotheby’s International Realty Cayman Islands advice to anyone looking to use this transformational platform is to do your own homework, seek advice and guidance and self-educate before determining if it would be accepted and allowed in the particular jurisdiction you purchasing in.
It is early days, but with the future of digital currency in real estate having arrived, it promises to transform the way we buy and sell property.