The summer is traditionally a quiet time for property moves. But at the end of July, Christie’s International Real Estate Southern California, based in LA, made waves with a new launch: the US’s first dedicated premium cryptocurrency division. With a $1bn portfolio of properties accepting digital currency payments, the brokerage has put together a team of lawyers, analysts and crypto experts to handle transactions in which both the buyer and seller work exclusively with digital payments.
The launch followed the US government’s passing of the Genius Act, the country’s first major cryptocurrency legislation. Genius — which stands for Guaranteeing Essential National Infrastructure in US-Stablecoins — is, as its name suggests, intended to establish a regulatory regime for “stablecoins”, a form of cryptocurrency backed by reliable assets, such as the dollar. The act reflects Trump’s own conversion to an asset class he once viewed as “a scam”, but it’s also an indicator that cryptocurrencies are being used by some as a means of purchasing everything from McDonald’s to mansions. And in terms of the US property market, it is pushing at a door that other countries have helped to unlock.
“America entering the conversation [in this way] does lend weight,” says lawyer Laura Birrell, chief executive and co-founder of Parallel, the first company in the Cayman Islands to facilitate cryptocurrency real-estate transactions. The act, she says, is helping the idea of buying homes with cryptocurrency to “move out of the fringe”.
Aaron Kirman, chief executive of the Christie’s subsidiary, decided to open the division after completing several large cryptocurrency sales. “I had a client call me and ask, then a second. In about 2022, I realised there was [increasing] demand. Now, we’re not just accepting crypto, we’re creating a new marketplace.” A $2.2mn mid-century home in Pasadena and a $63mn five-bedroom mansion on Nightingale Drive in West Hollywood with views to the Pacific are a sample of what he has to offer.
The new division has a two-tiered appeal for buyers, he says: on one level to “a growing class of digital asset holders looking to diversify into premier real estate” and on the other to those wealthy (and often famous) clients seeking the utmost discretion. Kirman believes that purchasing with cryptocurrency can potentially provide them with a greater degree of privacy than the limited liability companies (LLC) that are the traditional means of maximising anonymity. For sellers, the advantage is that it potentially broadens the pool of available buyers, particularly at the top end of the market.
But it’s not just the rich and famous who could stand to benefit from the Genius Act. According to a recent Gallup poll, about 14 per cent of American adults now hold at least some cryptocurrency, and in June, the US government-sponsored mortgage providers Fannie Mae (the Federal National Mortgage Association) and Freddie Mac (the Federal Home Loan Mortgage Corporation) were instructed to consider crypto investments as part of homebuyers’ portfolios when applying for mortgages.
The UK property market has largely been resistant to crypto — Andrew Bailey, governor of the Bank of England, remains a naysayer. Others are wary of a means of payment that is often linked with extreme risk takers and the nefarious.
It appeals to those wealthy (and often famous) clients seeking the utmost discretion
“It’s an interesting, innovative area, but until regulatory frameworks catch up, buying property with crypto remains a legal and financial grey area,” says Liam Bailey, partner and global head of research at Knight Frank. First, there is compliance. “Most legal systems and banks require source-of-funds verification; this is more challenging with anonymous or semi-anonymous crypto holdings. Also to some extent the infrastructure to support crypto-to-property deals — escrow, legal contracts, lender support — is still in its infancy.” He adds: “There is also an issue with volatility — rapid price swings in crypto can make it difficult to lock in property values or structure deals with confidence.”
But a handful of countries, particularly those keen to attract the wealthy, are increasingly providing a welcoming environment for homebuyers using crypto as means of payment.
While it is still early days for cryptocurrency property purchase, broader proposals on how it should be used and regulated are paving the way for more widespread adoption. In December last year, for example, the EU finalised MiCA (Markets in Crypto-Assets Regulation), which sets out clear guidelines regulating stablecoins and other cryptocurrencies. EU officials are also accelerating plans for a digital euro in the wake of the US stablecoin law. The UK’s approach is evolving; last month the Financial Conduct Authority lifted the ban on offering crypto exchange traded products to retail investors.
Dubai, one of the world’s most buoyant property markets, has taken the lead in terms of establishing infrastructure to support a move towards increased cryptocurrency use in the sector. In 2017, the Dubai Land Department (DLD) launched a blockchain platform to record real-estate contracts, including leases and registrations. In 2022, Dubai introduced the Virtual Asset Regulatory Authority (VARA), the world’s first regulator for virtual assets, which oversees all digital asset use in the UAE, including real estate. VARA has worked with the DLD to approve frameworks that allow crypto to fiat (government issued currency) exchange through licensed platforms, and signed partnerships to streamline digital transactions to real estate. Later this year the UAE is launching the digital dirham, a digital version of the UAE’s national currency.
Victoria Garrett, head of global residential at international real estate agents Savills, feels there are still too few crypto sales taking place to call this a trend, but in terms of Dubai’s practices, sees the use of blockchain as advantageous. “It gives you one single source about a purchase history, which makes transactions run much more smoothly.”
The Genius Act reflects Trump’s own conversion to an asset class he once viewed as ‘a scam’
Dubai’s regulatory framework and the fact that it has no capital gains or personal income tax on crypto profits earned by individuals are key drivers in the digital property market; a spend of Dh2mn ($544,588/£407,140), or Dh1mn for over 55s, brings the benefits of a golden visa. Off-plan purchases are popular and developers such as Damac and BinGhatti accept direct payment in specified cryptocurrencies, and can make the currency conversion. Once a sale has been agreed, prospective purchasers are sent anti-money laundering and “know your customer” documents to verify their identity and the source of their funds. It is also possible to buy existing property with cryptocurrency, though sellers do not accept cryptocurrency payments directly; a regulated service provider exchanges the currency into dirhams.
Engels & Völkers Middle East is currently selling a number of properties in prime locations that accept crypto payments, such as the apartments at Passo by Beyond at Palm Jumeirah (from Dh5.5mn), and a five-bedroom villa at Damac Lagoons at Dh3.725mn. “What has surprised us is that cryptocurrencies are being used not only by people who’ve made their money recently, but by traditional old money — and it’s not just one nationality,” says chief executive Daniel Hadi.
In Europe, Switzerland has been at the forefront of adopting cryptocurrencies, introducing laws around the trading, custody of assets and classification. Since 2021, the canton of Zug has accepted bitcoin and ether as a means of paying tax and, currently, the Swiss stock exchange is exploring the creation of a European venue to trade cryptocurrencies.
The southern Swiss city of Lugano in the canton of Ticino, however, is really taking the lead with its ‘Plan B’. Launched in 2022, the strategy is intended to make the city the European hub of bitcoin, blockchain and decentralised technologies, encouraging start-ups and further innovation. Here, crypto is integrated into commercial life, with bitcoin, tether and LVGA being used as a means for paying taxes, public services, parking tickets and tuition fees. It is accepted by 150 local retailers and some estate agents.
Lugano sits on the picturesque edge of Lake Lugano surrounded by scenic mountains. The largest Italian-speaking city in Switzerland, it is the economic and cultural fulcrum of southern Switzerland, combining Swiss stability with Mediterranean flair. Its enviable lifestyle positives include an extensive array of top-of-the-range property. “Switzerland is not a tax paradise, but it’s better than Europe in general, and we have seen a boom in the luxury market over the past two years,” says Simon Incir, owner and chief executive of Engel & Völkers Ticino, “with an influx of buyers from England, Germany, Norway and Denmark.” Agency research reveals a 20 per cent rise in the price of detached houses in southern Switzerland between the third quarter of 2020 and the same period in 2024.
“Property is generally bought in US dollars,” says Incir, who is selling a six-bedroom contemporary villa with panoramic lake views for SFr6.9mn ($8.575mn/£6.45mn). But, he says, for those looking to buy using crypto, “the first step is to set a price using a stablecoin [to limit] fluctuation in price. The seller can then decide to convert [payment] to Swiss francs or can keep the entire amount in crypto once they have opened an account with the notary.”
The agency has seen fewer than 10 crypto sales a year, mainly international buyers, but Incir believes that the foundations are there for more transactions of this kind. “Some sellers are open to accepting crypto payments, as they can convert the funds into Swiss francs. Their priority is receiving the full asking price, and the more people who make money in crypto and move to Switzerland, the more common it could become.”
The Cayman Islands, the self-governing British Overseas Territory in the Caribbean, has also become prominent in the evolving crypto property market. Having been an offshore jurisdiction of choice for many of the world’s largest banks for more than 30 years, in 2020 it became one of the first locations to regulate virtual assets, by passing the Virtual Asset (Service Providers) Act (VASP).
Grand Cayman has hit the sweet spot for crypto investors. There has been substantial interest from a range of buyers from fintech and family offices to digital expats from around the world
For property hunters — crypto or otherwise — Grand Cayman and its capital George Town have clear attractions. As well as a relaxed and safe lifestyle, with excellent healthcare, education, and transport connections to the US and Europe, its tax regime is an obvious draw. Residents pay no income or capital gains tax and no annual property taxes; the islands’ golden visa programme offers a direct path to residence for those investing a minimum of $2.4mn in Cayman real estate.
The quality of the property is evolving to reflect an increased demand from international buyers, and Mandarin Oriental recently launched new-build residences (from $8mn).
“Grand Cayman has hit the sweet spot for crypto investors,” says Gregory Surabian, senior managing director of Melkonian Capital Management, developers of the 42-residence project. “There has been substantial interest from a range of buyers from fintech and family offices to digital expats from around the world.” None, as yet, has bought using crypto, however.
Since George Town-based VASP Parallel brokered its first crypto sale in 2022, it has completed six real-estate transactions in crypto totalling almost $35mn. The company claims to use the most secure blockchain technology, escrowing cryptocurrency in a compliant wallet until the legal process is complete.
“We wanted to make it as straightforward as possible,” says co-founder Birrell, a British lawyer and formerly in-house counsel for Bovis in the UK. “And bring it to a different pool of buyer.”
Birrell acknowledges that crypto has not always had an unblemished image, but believes the Cayman Islands’ approach is taking it away from “a wild west scenario”. “People want a compliance route and to do things in the right way.”
Meanwhile, back in LA, Christie’s crypto subsidiary is yet to make any closings since its July announcements. But, as Birrell acknowledges, it opens the door to “a change in perspective”.
Read more on Financial Times News
