If you’ve been reading the news lately, you may have caught the story about a Metro Vancouver home advertised for sale on Craigslist in Vancouver and Hong Kong for $2,099 Bitcoin. Equivalent to $5 million Canadian (which was double the MLS price) this listing drew media attention due to China’s crackdown on currency outflows, since residents are not allowed to take out more than $50,000 out of the country for investments, especially to invest in residential real estate abroad.
Since the controversy hit the press, the ad has been taken down. However, it raises attention to whether Bitcoin is the way of future, and whether this will soon become an accepted, maybe even preferred, form of transactions for foreign investors in the commercial real estate industry.
Bitcoin gained a lot of attention back in 2009 as the first digital payment system. One of the major selling features was the freedom and speed of the transactions, meaning you never had to wait for bank hours to send a transaction and could bypass all banking fees. The ease of Bitcoins means you can send and get money anywhere in the world at any given time.
Despite these pros, Bitcoin hasn’t been adopted on a mass scale, and until this article, did little to roam the headlines. While some businesses are accepting Bitcoins, it’s far from widespread. This is mainly due to a lack of awareness and understanding over of how it works.
With fewer fees, the commercial real estate industry could cut considerable costs and increase efficiency by enabling secure, peer-to-peer payments. This makes it easier for people to invest - however, as we saw this week, would have to be better monitored so investors wouldn’t violate the governing laws of their country and of Canada’s.
For now, it will be a considerable amount of time until Bitcoin is accepted as a form of payment for the real estate industry. In Canada, real estate agents are not allowed to accept digital currency because it hides the purchaser. As Western Investor explains, “Under Canada’s Proceeds of Crime and Terrorist Financing Act, a realtor must be able to positively identity the people involved before a transaction can complete.” To date, Australia has the only real estate company that’s accepting Bitcoins from foreign buyers.
Do you think Bitcoin should become an accepted form of currency for developers and tenants? Tweet @naiopvancouver and tell us your two cents!