This is How Dubai is capitalizing on the cryptorich increasingly turning to real estate investments
There has been an increasing number of real estate investors who are closing property deals through cryptocurrency payments as a means of speeding up the buying process and cutting out the middle-men.
Dubai-based assets digitization start-up Xplor is looking to capitalize on this trend. The tech frim has developed a digital brokerage platform where potential buyers can see the property’s 3D simulation online and pay for it using cryptocurrency.
“Our core focus is to disrupt the industry and come up with a solution which connects end-users directly with the real estate developers, cutting out all middle-men,” said Can Turkan, chief operating officer, at Ayana Holding and founding partner of Xplor, which is a part of Ayana Holding.
The aim of the development of this new platform is to attract new investors with cryptocurrency deal. “We are allowing crypto-investors to pay with their cryptocurrencies and accept bitcoin, ethereum and 70 other digital currencies,” Turkan added.
The current property investment model is time-consuming and costly, according to tech firm's founder.
“In the traditional international property investment model, investors need to visit the country where the property is and spend some time there exploring, and doing the needed paperwork. Also, there are many intermediaries including real estate developers, brokers, banks…,” he said.
“Typically, when paying for property remotely, there are certain limitations to transferring the money for the down payment into the country, including transaction limits,” added Turkan.
Through Xplor’s digital brokerage platform, which is expected to launch by October, Xplor works with a custodian bank to convert the digital currencies into fiat currency which is then sent to the real estate developer.
Cryptocurrencies can be transferred in minutes and with negligible fees in comparison to payments through banks, which can take days and can become very costly, said Turkan.
Another reason why real estate investors are favoring payments in cryptocurrencies is that the blockchain technology behind them acts as a digital ledger of transactions, increasing transparency.
This is done, in order to circumvent money-laundering concerns, Xplor will outsource due diligence and KYC procedures to experts who are specialized, the company will also conduct video verification when veting potential investors.
The start-up’s model of providing a comprehensive view of the property and its surroundings further streamlines the property investment process by allowing potential buyers to decide on what they want without the influence of brokers or developers, said Turkan. He added that it also saves them a visit to the country.
While it is too soon to exactly quantify how cryptocurrencies and blockchain are disrupting the global real estate market, numerous reports highlight the potential for the technology to transform the industry by making it more efficient and modern.
Several real estate developers in the UAE, including Ellington Properties, are accepting payment in cryptocurrencies if managed through licensed brokers, Paula Wehbeh-Gambrell, chief executive officer-Strategy at Ellington Properties told Arabian Business in an interview in April.
In January last year, Huobi, a digital assets exchange provider, announced its partnership with Dubai-based Fäm Properties to offer secure crypto payment options for its real estate investors.
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