How the Cryptocurrency Act of 2020 will impact Real Estate
The Crypto-Currency Act of 2020 was introduced in draft form to the United States House of Representatives in December of 2019. The purpose of the Crypto-Currency Act of 2020 is to make progress clarifying the regulation of Digital Assets. It separates these Digital Assets into three categories: crypto-currencies, crypto-commodities, and crypto-securities. Real estate is part of the crypto-securities category.
The Crypto-Currency Act of 2020 states that the tokens of crypto-securities represent “debt, equity and derivative instruments that rest on a blockchain.” It goes on to state that this includes those that are governed by “smart contracts and collateralized by other digital assets.” Real estate is part of this and it is regulated by the Securities and Exchange Commission (SEC.) The Crypto-Currency Act of 2020 requires the tracing of transactions. The act emphasizes that crypto-securities transactions will be regulated much like current real estate transactions in a manner similar to what financial institutions require for regular currency transactions.
Opportunities For Safer Real Estate Transactions With Crypto-Currency Technology
The proposed Crypto-Currency Act of 2020 will allow businesses and institutions, such as real estate-related companies, brokerages, and professionals, who are looking for growth in crypto-currency technology to have the opportunity to participate in this new wave of business. The act calls for all transactions to be traceable which safeguards criminal financial activity, fraud, and money laundering. The act is applauded by the crypto-currency world and is being embraced by the real estate world.
During the past four years some developers, builders, and complexes have already started to partner with companies, such as BitPay, that provide Bitcoin payment for real estate transactions. BitPay is the world’s largest processor of bitcoin. It acts as a payment processor for home buyers. The firm BitPay exchanges bitcoin into dollars and transfers the funds on behalf of the buyers. The funds to purchase real estate are transferred to the buyer’s escrow agent at closing. BitPay has already processed millions, close to billions, of dollars in real estate transactions for individual buyers and corporations.
Who is Already Onboard?
So far crypto-currency real estate transactions have been for very high-end home and commercial real estate. The average home purchased with crypto-currency is approximately $1 million. It processes real estate transactions in some of the world’s highest-end real estate markets such as Dubai. More recently they are processing crypto-currency real estate transactions in a condominium resort complex near the Walt Disney World area in Orlando, Florida. Clients from all over the world are flocking to this crypto-currency real estate opportunity. They are coming from countries such as China, Brazil, and Turkey. This community only allows crypto-currency transactions for the purchase of their condominiums.
Bitcoin Holders to Diversify Portfolios
Crypto-currency has been around for quite a few years now. Investors are looking for ways to diversify their cryptocurrency portfolios. Real estate is the obvious choice. With the enhanced regulations of the new Crypto-Currency Act of 2020, more and more investors will be using cryptocurrency to purchase both commercial, residential, and luxury real estate. It is important that developers, builders, and real estate professionals learn more about this method and process of purchasing real estate because it’s not going away anytime soon.
Opportunities For Real Estate Professionals
Real estate agents, brokers, managing brokers, attorneys, title companies, mortgage lenders and all real estate related professionals should hop aboard the crypto-currency train while interest rates are low. Purchasing real estate with crypto-currency is going to become more and more popular and common in the years to come. There is an opportunity for real estate professionals to earn more money for their services if they are educated about purchasing real estate with crypto-currency. Also, some real estate transactions and communities will be for crypto-currency purchasers only. So if real estate professionals aren’t educated and don’t practice these types of transactions, they won’t be able to earn a commission for these sales opportunities.
Advantages For Buyers
Crypto-currency transactions settle within seconds. This is very advantageous for buyers because they won’t have to physically go to the bank to get funds for their real estate closing or arrange and wait for a wire transfer of funds. This will save everyone time at closings. It will save time for attorneys, title company personnel, escrow company personnel, lenders and more. All of these real estate related professionals will free up time for other clients and transactions. Buyers will have the keys and be in their new homes faster than ever.
The Crypto-Currency Act of 2020 is a sign that cryptocurrency is here to stay. Just like any type of technology related to real estate, real estate professionals need to stay on top of trending and new technologies if they want to continue to grow and evolve in the future. Their commissions and earnings are depending on it.