By Dolores Perez Islas – CEO SILMÉXICO​

Real estate sellers, developers, and their brokers should consider an alternative approach for marketing and selling properties for local and international buyers.  This approach involves closing real estate transactions using cryptocurrency.
 
Some of the real estate brokerage firms in Mexico have started slowly embracing the notion of selling their clients’ properties for virtual currencies (also commonly referred to as “digital currencies,” “cryptocurrencies” or “crypto”).
 
For example, some international real estate platforms displayed on AlgoCap’s website can be purchased for Bitcoin, Ethereum, and Stablecoins, including Gemini Dollar (GUSD), Binance USD & Coinbase Stablecoin (USD).  Benefits of crypto have fascinated people, who must be looking for the best exchange platforms. Mexican market  has still a huge potential to offer some alternatives to purchased virtual currency.
 
Bitcoin went from less than $1,000 to above $10,000 in 2017 alone. Now, it stands three times as much. However, it’s one of the most volatile as well.
 
In Mexico, some real estate companies in Cancun, Los cabos,  Puerto Vallarta, Huatulco and Mexico City started to accept crypto currency. For example, there are Bitcoin ATMs in Los Cabos that allow a convenient transaction to Mexican Peso. Otherwise, there are some online platforms such as Bitso App, to sell your money. Then, withdraw from commercial banks, Mastercard, American Express, or Paypal.   The ever popular Bittrex is a well-known Cabo trading platform actually the most popular in Mexico.
 
Earlier this week, Bitso Exchange Company hit a $2.2 billion landmark. It provides 2 million people across Latin America the escrow-protected service to mine bitcoins along with eight other currencies.
What most real estate market participants don’t realize is that every single real estate listing in the Mexico could be purchased with crypto currency . This, of course, requires proper structuring and knowledgeable intermediaries, including attorneys, exchanges, banks, and/or custodians.
 
When structuring a real estate purchase using virtual currency the parties involved in a transaction must take into consideration, among other factors, tax and escrow complications for accepting payments in Bitcoin, know your client (KYC)/anti-money laundering (AML) and checks on the purchaser and the purchaser’s digital wallet.
 
There have also been a lot of misconceptions surrounding the use and regulations of Bitcoin in the Mexico and abroad, like the ones that virtual currency payments are untraceable and used mainly for illegal activities.
 
On the bright side, with proper legal and tax structuring, making real estate listings available to buyers interested in paying with Bitcoin presents an intriguing opportunity. Cryptocurrency has become a major market for investors and virtual currency miners around the world.
Given the volatile nature of virtual currencies such as Bitcoin, many investors and miners prefer to diversify their Bitcoin holdings, either by investing in precious metals or US real estate.
 
In addition, real estate transactions involving Bitcoin may be structured and closed efficiently often faster than all-dollar transactions especially if a real estate transaction involves a foreign buyer.
It is a myth that Bitcoin transactions are untraceable.  In fact, cash not virtual currencies  is the most intrinsically private means of transacting.
 
Sellers unwilling to accept virtual currency for their real property can request a buyer to convert his or her currency to dollars that in turn would be used to cover the purchase price down payment, remaining closing balance, and expenses.
 
Offering to accept crypto currency  as payment may provide sellers with an advantage among investors with substantial virtual currency holdings and a desire to move those holdings into real estate.
Engaging in such offerings will require the seller and his or her representatives to understand the options of executing real estate transactions using the virtual currency  and the various methods for converting that currency into MXN or USD.
It is very important to have appropriate legal and tax planning, sellers can set their listings apart and attract purchases using the millions  of dollars currently held in virtual currencies.

2 Responses

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