• High-end rental paid for using Bitcoins
• ‘One in six calls’ raising crypto queries
• Firm allies with private bank for ‘future’
By NEIL HARTNELL
Tribune Business Editor
Bahamian realtors yesterday revealed they are developing strategic alliances to “embrace” cryptocurrencies already being used as a means of payment for local property transactions.
Gavin Christie, CA Christie Real Estate’s managing partner, told Tribune Business that The Bahamas must be “open minded” when it comes to this space as his agency has already “facilitated” a high-end rental in a gated community that was paid for entirely with Bitcoins.
While cryptocurrencies will likely be confined to the high-end luxury market initially, he suggested that its use as a payment method in Bahamian real estate transactions will expand into other market niches as persons become more educated and familiar with the concept and how it works.
Mr Christie said “one of the first questions” he was asked by a prospective client on a conference call yesterday was whether they could acquire Bahamian real estate using cryptocurrency, adding that this query is now appearing in one out of every six “inquiries” he is fielding for high-end Bahamian real estate.
And Matt Sweeting, chief executive at 1oak Bahamas, told this newspaper that his company was forming a strategic alliance with a locally-based private bank “that is very bullish on cryptocurrency” so that it can facilitate property purchases when this is the desired payment mechanism.
He added that his agency had come close to a deal where cryptocurrency would be used to acquire Bahamian real estate, but this had now been “put on hold” due to the economic uncertainty around COVID-19. Nevertheless, Mr Sweeting predicted that cryptocurrency will be used in 5-10 percent of high-end Bahamian property acquisitions within the next five top ten years as its popularity and use soars.
Both realtors spoke out after Ryan Knowles, one of their colleagues, wrote in Tribune Business this week that cryptocurrencies and blockchain technology are “working in tandem to make a hot market even hotter”.
He added that two Bahamas-based developers, Aqualina and Goldwynn, had announced they will facilitate cryptocurrency transactions for purchases in their developments. However, Jason Kinsale, Aqualina’s principal, declined to comment when contacted by this newspaper yesterday.
Still, Mr Christie revealed: “I was on a call maybe about an hour ago with a potential client that looking at specific properties, and one of the first questions they asked was if there was a capacity to purchase and acquire it through cryptocurrency.
“We are seeing that the crypto space is definitely increasing and coming to the forefront as it continues to grow. There’s been an uptick in inquiries for crypto to do transactions. We started to see the requests coming in from last year.
“This year we participated in, and facilitated, a luxury rental in one of the gated communities and that transaction was done in cryptocurrency. The tenant was heavily into cryptocurrencies and so was the landlord, so they paid for that rental in Bitcoins,” he added.
“The demand has definitely increased and the interest is there globally. Our phones are ringing, and every six calls in the luxury category that potential buyer is asking or querying if cryptocurrency is an option.”
Mr Christie said real estate developers and developments in markets such as south Florida were “not just offering but encouraging” buyers to use cryptocurrencies as a payment mechanism. Cars, real estate and some nightclubs and restaurants were now accepting this payment mechanism.
However, while agreeing that it “could become a big player within the space as the world evolves and technology evolves”, he argued that cryptocurrencies are unlikely to “surpass” more traditional payment means.
“The Bahamas has to be open and open-minded, not just in the real estate space but the entire Bahamas has to be open to it, educate themselves about it,” Mr Christie said of cryptocurrency. “It’s something that’s here and will be here with us to stay, I believe. Instead of shying away, it’s better that persons try to educate themselves as much as possible about this space and embrace it.”
Cryptocurrencies are digital assets that are not backed by Central Banks or paper money. Instead, they are seen more as investment vehicles, but can operate as payment means or a medium of exchange where individual coin ownership records are stored in a blockchain ledger kept in the form of a computerised database.
Meanwhile, Mr Sweeting told Tribune Business: “We had possibly negotiated a transaction in cryptocurrency and developed a strategic banking partnership. This private bank is very bullish on cryptocurrency and they have a whole department focused on acquisition of cryptocurrency.
“The world currently knows very little about cryptocurrency, and for clients to say they don’t want to get involved in it and want fiat cash for any purchase, our banking partner is willing to convert cryptocurrency into cash. It makes cryptocurrency transactions very do-able. We sought to create the partnership with the private bank to capitalise on what we see as real estate’s future.”
Mr Sweeting declined to name his agency’s private banking partner, and confirmed that the cryptocurrency deal he was working on has yet to complete. “We were in touch with a buyer who had bought in cash and has cryptocurrency holdings, and he said he may consider a purchase in cryptocurrency but that has not happened yet,” he added.
“It’s not closed; just been put on hold due to what is going on with the economy and the like. It can come back. We do see a huge future in it. Cryptocurrency will continue to be a force to be reckoned with, a long-term presence. It will not be here today and gone today. It has a real foothold in the global economy, and in real estate transactions it makes it easier to transfer funds from one place to the next in quick time.”
Mr Sweeting said the first cryptocurrency real estate purchase had transferred funds from the buyer to the seller in just 20 minutes, adding that The Bahamas has the ability to do likewise. “It speaks volumes to what the future could be when owners become more open to doing business this way,” he added.
Asked how many Bahamian real estate transactions will likely be facilitated by cryptocurrency within the next five years, Mr Sweeting estimated between 5-10 percent of all purchases - concentrated among high-end purchases of $5m or more - will be paid for using this method.
He added that the ease of moving money via this method would be especially attractive for high net worth buyers, but said current Know Your Customer (KYC) and anti-money laundering rules will still apply. “This could be a major thing for The Bahamas and real estate if the country and industry embrace this more,” Mr Sweeting said.