Chances are you’ve read stories about how cryptocurrencies are set to take over from conventional money. Or about those who claim to have made a fortune from investing in cryptocurrencies. So here we’ll take a look at whether you can buy, invest in or sell property using cryptocurrency.

What exactly is a cryptocurrency?

Cryptocurrency is a virtual currency. Cryptocurrencies are traded online and secured by something called blockchain. Cryptocurrencies aren’t issued or controlled by governments as conventional or fiat currencies are. They mostly aren’t backed by assets like gold, although they potentially can be.

Perhaps the best known cryptocurrency is Bitcoin. Although there are believed to be around 10,000 other cryptocurrencies in the world today.

Crypto has gained some popularity because it is outside the control of any one organisation and it offers confidentiality to those who buy, sell and own it. Cryptocurrency values have also tended to be very volatile in recent times, so trading in them has gained a reputation as being potentially profitable.

So can you buy or invest in a property using cryptocurrency?

The simple answer is that you can buy or sell a property in any medium which buyer or seller are willing to accept – whether ‘real’ currencies, gold or pretty much anything else.

So, yes, in theory at least you can buy a property using cryptocurrency.

There are a few possible snags, however:

Firstly, you would need to find a seller who is willing to accept cryptocurrency.

Many people do not even know what a cryptocurrency is. Many who do are still very wary of them.

There is also the issue of deciding what a particular property is worth in cryptocurrency – since most people only understand market value in pounds or other currencies like dollars or euros. Buyer and seller would need to agree what cryptocurrency would be used. As well as what to do if the value of the cryptocurrency changed between agreeing the sale and completing the transaction.

A national newspaper reported that the first UK house had been sold for Bitcoin back in 2017. Today it’s possible to find a few property listings which indicate a cryptocurrency will be accepted.

Cryptocurrencies tend to be more acceptable amongst younger age groups. Some countries have accepted the concept of crypto much more than the UK. On the other hand, some countries have made these currencies illegal.

Secondly, you would need to find a lender who would accept a cryptocurrency. If you are buying with a mortgage, as with most property transactions, you would need to find a bank or building society who would accept a cryptocurrency as a deposit.

Next, you would need to find a solicitor or conveyancer who is willing to work with a transaction that involves cryptocurrency.

A particular problem here is that solicitors involved in property transactions are legally required to confirm the identity of the buyer and the source of the funds as an anti-money laundering measure. This could definitely be a problem, also bearing mind that cryptocurrencies are sometimes thought to be involved in criminal activity.

The FT reports that lenders including Barclays, Halifax and Nationwide will accept a deposit from the proceeds of crypto. But it also points out the difficulty of finding a conveyancer.

HM Land Registry has indicated it may register property transactions in currencies other than pounds, however.

There is also the issue of how a cryptocurrency would work alongside Stamp Duty or Capital Gains Tax.

Can you sell a property for cryptocurrency?

If you wanted to sell a property you own for cryptocurrency you would face much the same issues, only in reverse. If you were only willing to accept cryptocurrency that would reduce the number of possible buyers. It could severely reduce the market value of your property, or mean you would not find a buyer at all.

If you do want to buy, sell or invest in property with crypto it is likely to be simpler to convert the cryptocurrency to a ‘real’ currency first, rather than undertake what is known as a cryptocurrency wallet to wallet transaction. However, this would in many ways undermine the whole point of using cryptocurrency in the first place.

At the end of the day the answer is that, yes, you could probably buy or sell a property using cryptocurrency. But it would be far from simple. You would certainly need to investigate all the ins and outs before trying to buy or sell a property this way.

Of course, as with much else in the digital world, issues surrounding cryptocurrencies can change very quickly indeed. Wait a few years, or a few months, and things could be very different. It is very much a case of watch this space.

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