Homefront: ‘Can I use cryptocurrency to buy property in the UAE?’

It is difficult to use this mode of payment because digital coins are not recognised as legal tender in the UAE

(FILES) This file photograph taken on January 8, 2021, shows a Bitcoin digital currency logo on the front door of an ATM in Marseille, southern France. Bitcoin's value plunged on May 19, 2021, after China signaled a new crackdown on the cryptocurrency, but its losses were cushioned after Tesla head Elon Musk spoke up on Twitter. The virtual currency fell to almost $30,000 -- less than half the record value it reached last month -- before climbing back over $39,500 around 2000 GMT. It was still above its level at the start of the year. Bitcoin recovered somewhat following tweets from Musk that featured a diamond and hands emoji, taken as a signal the company had not sold off its huge bitcoin holdings as the CEO appeared to suggest recently. / AFP / NICOLAS TUCAT

I am an avid cryptocurrency investor and hold significant holdings in digital tokens. I am now looking to diversify my portfolio by buying a few investment properties in the UAE.

However, I am not keen to pay cash for the purchases.

Do any mainstream developers in the UAE accept Bitcoin or other cryptos as a mode of payment? Are there any pitfalls I need to watch out for when buying property with a cryptocurrency?

I am also keen to purchase an investment property in a sustainably built project. Are there such projects available in the UAE? What building standards are they required to follow to be classed as sustainable? SK, Sharjah

Buying property via cryptocurrency is not as straightforward as one might think, more so as cryptocurrencies are not recognised as legal tender in the UAE.

The Central Bank of the UAE has issued guidance on cryptocurrencies, saying that it is not “presently accepting [or acknowledging] crypto assets or virtual assets as legal tender in the UAE”. In December, the regulator said: “The only legal tender in the UAE is the UAE dirham.”

The UAE's Ministry of Economy has also said in the past that any buyer using cryptocurrencies as a means to buy property is a potential red flag in the fight against money laundering.

There are two sustainable housing projects in the UAE – one in Abu Dhabi and the other in Dubai.

Masdar City in Abu Dhabi was initiated in 2006. It uses technology and solar power to help reduce energy and water consumption to preserve the environment.

Sustainable City in Dubai was established in 2015 and is an eco-friendly project that focuses on social, economic and environmental sustainability.

In Abu Dhabi, all new projects and buildings are subject to a development review process in which the applicant has to present the sustainability vision. All buildings must have a Pearl rating of at least one.

In Dubai, the municipality confirmed that since 2014 it has made it mandatory for all buildings to have green building specifications. These mainly focus on how the building is constructed and how it functions after completion.

Mario Volpi is the sales and leasing manager at Engel & Volkers. He has worked in the property sector for more than 35 years in London and Dubai. The opinions expressed do not constitute legal advice and are provided for information only. Please send any questions to mario.volpi@engelvoelkers.com

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