One of the most progressive countries in the world is the United Arab Emirates. It seems that people are already living here in the future, the economy and other spheres are developing so rapidly. Only here are the largest and most luxurious skyscrapers being built, and it was in Dubai that real estate for cryptocurrency was purchased for the first time. We found out from experts how objects are sold for virtual money in the UAE, asked about government support in this matter and reliable developers in the article.
The concept of “cryptocurrency” and the principle of operation
A new type of currency is a kind of digital means of payment. One of the most popular is Bitcoin, but there are others, such as Ethereum or Terra Classic. The system is not regulated by any government structure and is called “Blockchain”.
The principle of operation of the blockchain is an unbreakable chain of blocks of data, with encrypted data about completed transactions. It is used to retain, process payer data and identify transactions. It is noteworthy that information about the operation is stored forever, and new data is recorded as the next link in the chain.
Blocks store information about transactions, while the first block is only the wallet address from which the operation was performed and the date. When the second participant of the transaction confirms it, he creates a second block. It contains service data, information about the transfer itself, the wallet address and a special identifier.
Cryptocurrency can be owned either in coins (coins) or in tokens (tokens). Where coins, or coins, are the currency itself, and tokens, a kind of shares that ensure that the holder owns a certain share of cryptocurrency within a certain project. There are only two ways to get cryptocurrency – mining and stacking.
Due to the fact that data arrays grow every fraction of a second, large computing power is required. Each member of the chain that ensures the creation of new blocks receives coins. The more blocks, the more coins. Because of this, a real race arises, whole farms are created for mining – mining coins, due to the technical support for the creation of blocks. Such a system is called Proof of Work (PoW).
In turn, stacking works according to the Proof of Stake (PoS) algorithm, which implies storing coins and maintaining the network in working order. The participant provides computing power for a fee. Thus, it helps to ensure the operation of the algorithm. In many countries, cryptocurrency is banned, it is not recognized by many large corporations. But its existence is possible thanks to people interested in the development of this direction.
Cryptocurrency and Blockchain regulation in Dubai
All cryptocurrency issues are handled by the Securities and Commodities Authority (SCA) and the Dubai Financial Services Authority (DFSA). Under the jurisdiction of the structure falls:
- asset management;
- banking;
- credit services;
- securities;
- collective securities funds;
- depository and trust services;
- commodity futures trading;
- insurance;
- Islamic finance;
- international stock exchange;
- international commodity derivatives exchange.
Our own model for coordinating investment tokens was introduced just a year ago. The first stage of the digital assets regime of the DFSA forms an expert document 138. All persons involved in manipulations with digital shares are subject to the rules and regulations established by the document.
State initiatives
Since 2016, the government of the Emirates has launched cryptocurrency several times. All these projects have a common goal – increasing the efficiency of government, the formation of industrial resources and becoming an international leader. Among the most significant projects:
- The use of the cryptocurrency system by financial organizations Emirates NBD and Mashreq Bank. With the help of such advanced approaches, client security increases, the number of fraudulent transactions decreases, and a stable analytics platform is created.
- The launch of the Dubai Pay app in 2013. Using it, residents of the state can pay for services remotely. The Smart Dubai organization was responsible for the creation and launch of the project, the management of the tool was transferred to the Dubai Smart Government department.
- Smart Dubai is an organization entrusted with the mission to make Dubai a progressive benchmark of a progressive state, ahead of others for many years to come. All this with the use of modern artificial intelligence technologies, blockchain and smart contracts based on it, big data, interactive information panels.
- DP World – a company engaged in international maritime transportation has also undergone changes. The introduction of blockchain technology took place here, which made it possible to more effectively build a procedure for digitizing documentation and protecting it from external encroachments, simplify customer accounting, and eliminate repetitive processes.
- In 2019, Emirates Airlines launched its Skywards application, for modernization using the blockchain system. It is planned that its implementation will make it possible to strengthen the security of financial transactions and reduce the number of fraudulent transactions.
Features of acquiring real estate for cryptocurrency in Dubai
Before deciding on cryptocurrency real estate transactions, you need to find a reliable and responsible company that will do this. Make sure that the selected company has a license from the Dubai Economic Department (DED). Only in this case it can be an intermediary in conducting financial transactions.
For the operation, the payer has the right to choose any cryptocurrency that will be converted according to the current exchange rate at the selected representative office on the date of the operation. The final value of the transaction will be formed on the basis of the current exchange rate at the moment and the commission of the intermediary firm.
According to the requirements of the Central Bank of the UAE, all financial transactions within the Emirates must be carried out only in the national currency – dirhams (AED). That is why it will not be possible to pay with crypt directly. Despite this, the process is quite simple and is carried out in the following order:
- registration of a cryptocurrency wallet;
- search for an object of purchase;
- discussion of transaction parameters;
- conversion of housing costs into cryptocurrency;
- drafting a contract and specifying the full price in it transactions;
- transfer of funds to an intermediary firm and repayment of commissions;
- receipt of a check in local currency for transfer to an escrow account or the name of the owner.
Some deviations in the algorithm will occur if the investor invests in the object from the developer directly. The established form of the contract for payment by a third party is signed. The invoice is issued to the developer, and the investor is notified of the transfer of funds.
If a transaction is carried out with ready-made real estate, it is enough to make a payment by check in dirhams. The realtor will take care of the remaining issues on closing the transaction. Due to the fact that the exchange rate is constantly fluctuating, it may happen that the contract will not be profitable for one of the parties. In this case, termination of the contract is allowed. The total percentage of commission for the transaction may be about 6% of the value of the object of the contract.
Required documents
To make a deal, you will need to provide:
- buyer’s passport;
- legal identity card;
- proof of residence address;
- contact information;
- power of attorney for a representative.
In addition to the basic set of documents, it may be necessary to prove that the cryptocurrency was obtained in a legal and legal way . A foreigner will certainly not be able to make a deal in an Arab state on his own, so you need to carefully choose an intermediary company.
Which developers use cryptocurrency
It is best to choose only large companies that have already proven themselves in this area for a cryptocurrency real estate transaction. Among them are Emaar Properties, DAMAC Properties, Select Group, Dubai Properties, Meraas and MAG Lifestyle Development. It is best to cooperate only with those agencies that have state accreditation, as well as those intermediaries whose reputation is beyond doubt.
What kind of real estate can be bought with cryptocurrency
The popularity of blockchain is growing, as are the offers on the UAE market. Today, as part of a cryptocurrency transaction, it is possible to purchase real estate in several large construction projects.
The One JBR
Residential complex of 46 floors of premium level in the prosperous Jumeirah Beach Residence area. Investors have access to apartments of various levels and comfortable penthouses, where the layout provides spacious balconies and private pools.
Port De La Mer
A large-scale residential complex of Meraas company, located in the Jumeirah 1 area. One of the few places where a foreigner can purchase real estate for free use (freehold). The complex consists of 4 integrated sub-communities, where you can choose apartments of any level and spacious penthouses. Additional conditions are also available for residents in the form of a separate beach, a marina, round-the-clock security and picturesque pools.
Bulgari Residencies
The residential complex from Meraas premium class, was designed jointly with BULGARI Hotels & Resort is located on Jumeirah Bay Island. Here, foreigners are offered apartments of various levels, comfortable penthouses, luxury villas and even land plots for construction. The glazing has a panorama format and allows you to enjoy views of the yacht marina. Additionally, the complex offers concierge and butler services, catering, apartment cleaning, swimming pools and 24-hour security.
Cavalli Tower
Together with the fashion house Roberto Cavalli, the design and interior of the apartments of one of the most ambitious projects from DAMAC Properties was developed. The 70-storey tower is located in the Dubai Marina area. Here you can buy luxury real estate, super-luxury and extra-luxury residences “flying villas”.
Emaar Beachfront
Leading developer Emaar Properties offers real estate for cryptocurrency transactions in several of its projects. In such complexes as Marina Vista, Grand Bleu Tower and Beach Isle, you can buy luxury apartments, comfortable and spacious penthouses, villas, entire floors for personal use. Residents can use the facilities within their residential complex, but also the area as a whole.
Expert forecasts
Almost all experts agree that the cryptocurrency will continue its development and spread to all spheres of human life. In view of this, many things are changing and transforming under the new reality, including the real estate sector. Nevertheless, even despite all the advantages of the crypt, it will take years for its implementation on a wide and widespread scale to become possible.
It is already possible to purchase real estate in Dubai for cryptocurrency from the most popular and large companies, but it will not be possible to do this without certified specialists yet. Any cryptocurrency can be used in the transaction process.
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