The use of cryptocurrencies has entered our lives and it appears that it is here to stay. The use of cryptocurrency is growing by the day, and it is entering all kinds of markets. In our opinion the use of cryptocurrency will revolutionize the area of real estate in Cyprus.

Why use cryptocurrency to purchase property?

There are a number of incentives and benefits for using cryptocurrency as means of payment for the purchase of real estate, namely:

  1. Speed – the transfer of the funds from one wallet to another takes place in a matter of minutes.
  2. Transparency – The transaction is recorded in the blockchain, and the use of a unique digital identification system makes it easily identifiable and transparent.
  3. Security – blockchain technology makes it possible for the seller to confirm availability of funds, through the unique address of the purchaser’s wallet within seconds.
  4. Lower transaction fees compared to traditional banking institutions.

One of the main concerns of sellers is the volatility associated with cryptocurrencies, this problem is bypassed by the use of assets such as USDC or USDT, which are the most commonly used cryptocurrencies in such transactions, as they reduce the exposure to the risk of volatility.

Procedure for completing the purchase

Despite the use of cryptocurrencies, the process for completing the purchase is very similar to a traditional property purchase, we describe the steps below:

  1. Property is identified by the purchaser.
  2. The purchaser’s lawyer carries out the due-diligence exercise on the property, in order to ensure that the construction of the property is compliant with all relevant permits and/or licenses and to ensure that is will be transferred free of any mortgages and/or other encumbrances.
  3. The parties agree on the price of the property.
  4. The seller carries out the necessary due diligence on the purchaser to ensure compliance with the Prevention and Suppression of Money Laundering and Terrorist Financing Law L188 (I)/2007and other applicable laws, directives and regulations. Such due diligence includes the forensic screening of the wallet(s) from which the purchaser will make the payment.
  5. The agreement is prepared by the lawyers of the parties, noting that the unique wallet ID of the seller is indicated in the agreement for the sake of clarity and certainty as to where the funds will be transferred to.
  6. Once the funds are received by the seller a receipt is issued. The contract is then stamped and lodged at the Land Registry for the purposes of specific performance, as with any traditional property purchase.

Can the seller receive FIAT?

One of the main questions that are asked by a seller is whether they can receive their money in FIAT or if they need to keep the funds in the wallet in the form of cryptocurrencies, in this respect we have the following options:

  1. One option would be for the funds to be kept by the seller in cryptocurrency and/or invested in other forms of cryptocurrency to keep and sell at any point in the future at a higher price.
  2. If the seller does not wish to maintain the funds in cryptocurrency, then the seller has the option of converting the funds to FIAT currency through reputable crypto exchanges.

For further information and/or assistance with the purchase of property in Cyprus please contact our team at info@papakyriacoulaw.com