The Digital Currency and Its Process of Working
As for December 2021, the number of digital currencies on the market is more than 8,000. Cryptocurrency is a digital currency in the form of tokens or coins. It’s usually developed as a code and cannot be counterfeit. In most cases, digital currencies aren’t regulated by banks, tax and legal authorities including the government. The data of the actual cryptocurrency, the holder’s funds and transaction history is saved in the user’s wallet.
All in all, a cryptocurrency is a digital version of money that is made using a code or technology that cannot be modified. A blockchain technology on which the digital currency works is also almost impossible to hack.
Cryptocurrency & Blockchain Regulation in Dubai
Regulation in Dubai
Digital currencies and blockchain projects in Dubai are overseen by the Securities and Commodities Authority (SCA) and the Dubai Financial Services Authority (DFSA).
In October 2021, the DFSA unveiled its own regulatory framework for investment tokens, which acts as a reflection of the proposals made in consultation paper 138, published in March 2021, and forms the first phase of the DFSA's digital asset regime. This regulatory framework for investment tokens applies to people interested in marketing, trading, owning or issuing investment tokens in or from the DIFC. In addition, it also applies to authorized firms that intend to provide financial services relating to investment tokens (trading, advising on or arranging investment transactions, and carrying out insurance).
The UAE government has launched some blockchain projects, including the Dubai Blockchain Strategy which was launched in 2016. In 2018 the UAE Blockchain Strategy marked its goal which was to move 50% of government transactions onto a blockchain platform. It’s supposed that new technologies will save about AED 11 billion (USD 2.99 billion), 398 million documents and 77 million working hours annually.
Blockchain strategy initiatives that are led by Sheikh Mohammed bin Rashid Al Maktoum, the Ruler of Dubai and the Vice-President of the UAE, will help with the development of the emirate. Digital currencies and blockchain are implemented into Dubai’s economics and assist companies in doing business. The system of cryptocurrency and blockchain is being actively implemented in the sphere of the economy, which will make it easier to do business without bureaucracy. In real estate, blockchain will be used to create a registry of all real estate in Dubai, which is developed by the Dubai Land Department (DLD).
Even though the number of blockchain initiatives in Dubai are pretty much endless, the most engaging ones are:
How to Buy Properties with Cryptocurrency in Dubai
How to Buy Properties
with Crypto in Dubai
If you are planning to buy/sell or rent a real estate unit in Dubai with digital currency, it’s better to find professionals with experience in this sphere to help you do this. The company of the professional should have a license from the Dubai Economic Department (DED) and don’t forget to obtain reviews and look into the reputation of the company.
You have the right to use any cryptocurrency including Bitcoin, Ethereum, Usdt, etc to purchase a property. The rate should be fixed during the transaction at the central office of the trading company. You will come to know the price of a transaction and the commission in advance of the payment. In fact, there is nothing difficult about obtaining digital currency. You should firstly open a cryptocurrency wallet in case you don’t already have one. An individual or a legal entity can register this.
Before the real estate transaction, people usually choose the necessary unit and discuss the terms and conditions of the sale. This should concern digital currency transactions too. The buyer and the seller discuss the transaction and come to an agreement. If a buyer is going to pay for the unit in Bitcoin, the price of the chosen property is converted into the specific digital currency. Then the sum is noted in the agreement and cannot be changed under any conditions including an increase/decrease in the exchange rate.
The obtainer sends crypto currency to the wallet of a trading company and pays the commission. He/she is then given a cheque-in AED to send money to the seller’s account if the property is completed, or to an escrow account of the chosen property if it’s an off-plan object. If you are interested in a direct purchase from the developer, you will need to sign an agreement concerning the transaction from a third party. After that, the cheque is given to a developer, and the buyer gets a notification regarding the needed amount of money. In the case of completed property, it’s possible to pay for the unit after obtaining the cheque-in AED. After all the above, the real estate agent will help you with the transaction and you will eventually obtain the Title Deed for the property.
Important: Despite the fact that you can buy real estate with cryptocurrency, it is impossible to pay with it directly. According to the requirements of the UAE Central Bank, all transactions outside the territory of the state must be carried out using the national currency – the dirham (AED). In this case, it is necessary to transfer the digital currency to the account of the trading company and then get a cheque for the agreed amount of money. Only then can you pay for the purchase.
In addition, changes in exchange rates can make the transaction unprofitable for one of the parties which can lead to a dissolution of the agreement. A buyer should pay the commission to the trading company for their services, a registration fee to the Dubai Land Department (DLD) which is 4% of the unit’s cost and a 2% commission for the services of a real estate manager.
What Documents Are Needed to Buy A Property with Digital Currency?
What Documents Are
Needed to Buy Property
There are no differences in the specific documentation needed if you are obtaining a property with either normal money or cryptocurrency. An agreement should be written in Arabic or English and it’s better to hire a professional real estate agent who will explain all the difficulties. Arabic terms are not easy to understand, even if you are a basic speaker. It’s important for a buyer to know all the details of the agreement including the address, payment plans, etc.
To make a transaction, the following documents are needed:
Important: Be ready to be asked how you initially received the digital currency, and you will also need to show proof of the legality of transactions.
What Developers Are Ready to Sell Properties Using Digital Currency?
What Developers Are
Ready to Sell Property
The most well-known Dubai developers are ready to offer real estate to cryptocurrency holders. Among them are Emaar Properties, DAMAC Properties, Select Group, Dubai Properties, Meraas, Fam Properties and MAG Lifestyle Development. But an important condition is the cooperation with only licensed real estate agencies, brokers and trading companies with an impeccable reputation.
The following projects are offered for investment in Dubai real estate using cryptocurrency:
Several in-demand units are located in Emaar Beachfront. This is a project by Emaar Properties, the leading developer in the emirate. Emaar Beachfront is located between the Palm Jumeirah and Mina Seyahi and has good connectivity with other areas of the emirate. For instance, Downtown Dubai is a 25-minute drive from Emaar Beachfront. Interested buyers can choose from apartments, villas and penthouses within the development. Residents will be offered amenities and entertainment all within the same area. Such projects like Marina Vista, Grand Bleu Tower and Beach Isle can be obtained with digital currency. The starting cost of these units are AED 1,530,000 (USD 417,000).
BULGARI Residencies, located on Jumeirah Bay Island, is a complex by Meraas. You can choose one of 165 units that include 1-3 bedroom apartments, 4-bedroom penthouses, villas and ground plots. The BULGARI Residencies is under 24/7 security control. Concierge services, swimming pools and panoramic sea views make this place attractive both for residents and investors. The prices for these units start from AED 4,500,000 (USD 1,225,000).
Another well-known project by Meraas that can be obtained with digital currency is Port De La Mer, made of 4 sub-communities and located in the Jumeirah 1 area. There is a wide range of units to choose from, starting from 1-5 bedroom apartments and ending with 4-6 bedroom penthouses. A private beach, a marina and swimming pools as well as other amenities will be offered to residents. The cost of a 1-bedroom apartment here starts from AED 1,700,000 (USD 463,000).
Those wishing to live in Dubai Marina might like Cavalli Tower, which is a project by DAMAC Properties. The skyscraper design was made in collaboration with Roberto Cavalli’s fashion house. The 70-storey building provides 480 units, including luxury, super-luxury and extra luxury (also known as flying villas) units. The minimum price of a unit here is AED 1,750,000 (USD 476,000).
Why Choose Metropolitan Premium Properties Company?
The process of buying property in Dubai can be quite complicated and confusing, especially if you are not familiar with the local real estate market, the legal framework, local terminology, as well as the very process of investing in Dubai real estate, etc. In this case, a wise decision is to contact a licensed broker who will do all the work for you.
We, at Metropolitan Premium Properties, are ready to provide you with assistance and full support at all stages of the real estate transaction in Dubai and the UAE. Our specialists are licensed by RERA and are well versed in real estate market trends in the emirate, which ensures a quality and personalized approach to each client depending on their preferences, whether it is a purchase for life or an investment project.