As of January 2018, Chestertons Gibraltar accepts Bitcoin payments for property.
The well-known real estate agent has decided to delve into the cryptocurrency world following an increasing interest from property vendors and purchasers who want to invest in property with cryptocurrency.
The first property that has been made available to buy for 20 Bitcoins was a 26 square metre office in the World Trade Center, Gibraltar. And, it was the seller who approached the realtor.
The Managing Director of Chestertons Gibraltar, Mike Nicholls says:
“We knew that the high levels of interest in cryptocurrency would spill over into the Gibraltar property market sooner rather than later”.
Gibraltar along Malta is working on establishing themselves as a leading reputable jurisdiction for blockchain-based business, virtual currencies and ICOs.
The Legal Implications
Source: Chestertons Gibraltar
For a change, it wasn’t the marketing of the property that turned out to be the biggest headache – the legal implications and the financial security were the most concerning aspect of the entire process.
For this reason, Chestertons partnered up with a specialist Fintech legal firm, Ramparts who already had experience in dealing with crypto-world in Gibraltar itself.
Another strong asset was Xapo, one of the world’s largest Bitcoin cold storage providers who recently got granted a license to provide electronic fiat money custodial and transfer services from Gibraltar. According to Mike Nicholls:
“We wanted to lead the industry and were already in discussions with specialist fintech legal firm Ramparts, who are particularly strong in the crypto space and Xapo, the world’s largest and safest Bitcoin custodian and who are based in Gibraltar. My ethos is that as a business we should never stop innovating, improving and learning. This process has already been quite a learning curve and we haven’t even sold the property yet!”
The Financial Process
Traditionally, the process of buying a property hugely depends on the bank, and depending on the due diligence process; it may take a few weeks to a couple of months. The transaction is also secured via a bank and a magnitude of paperwork.
In this case, however, the transaction would be protected by blockchain and would have to happen instantaneously.
Conveyancing lawyer at Ramparts, Colleene Wink explained further:
“We have to ensure that both buyer and seller can transact through a secure process, which is normally via a bank but in this case will be using blockchain. We have agreed to accept our fees in Bitcoin as have Chestertons.”
To make sure that the volatility of Bitcoin doesn’t affect both parties too much, two unique factors had to be considered – the live Bitcoin exchange and the timing of the transaction.
To solve the first of these issues, Chestertons’ installed a live Bitcoin / GBP exchange rate in their office. Xapo facilitated the exchange rate, and it was continually updated. Naturally, both parties would have to be prepared for the price of Bitcoin to affect the future value of the property profoundly.
Secondly, the buyer and seller would have to complete the contract exchange at the same time as transferring money. Meaning, everything would have to be ready beforehand, and both parties would have to be present at the same location for security purposes.
Once the buyer has been identified, Xapo would undertake the required due diligence to verify the Bitcoin source. Afterwards, both the buyer’s and seller’s legal representatives would ensure that all parties are comfortable with the process and the transaction value.
Otherwise, the conveyance remained the same as during a traditional property transaction.
While Chestertons Gibraltar still accepts Bitcoin, in February, the estate agent received an offer of 20 Bitcoins for the property. While the offered seemed interesting, Chestertons also received a full asking price offer in GBP which has been accepted.
Read more about Buying a House with Bitcoin.