After a turbulent year for the cryptocurrency industry, the dust has calmed as banks and investors have regained interest in it.
Cryptocurrencies still have defenders as an alternative payment option, and real estate may be one of the beneficiaries. In recent times, cryptocurrencies have made significant advances in functionality, applications and security, and these developments have sparked interest in various industries, including real estate. Conventional real estate transactions can take weeks or even months to complete, while transactions involving cryptocurrencies can finish in minutes or hours. The speed of transactions is one of the main reasons real estate companies cite when asked about their preference for different payment methods. That's why one in five U.S. real estate companies plan to use cryptocurrencies for B2B payments next year, according to data from PYMNTS Intelligence.
โCorporate Changes in Payment Practices: A Deep Dive into the Real Estate Industryโ is a research study by PYMNTS Intelligence in collaboration with The Clearing House. The study is based on a survey of 125 executives from real estate companies in the US and collected information on the types of methods these companies use for their B2B payments.
According to the survey, checks, automated clearing house (ACH), and same-day ACH are the most used payment methods in the industry. However, many companies are actively seeking newer, faster and safer alternatives. Real estate companies are turning to cryptocurrencies for similar reasons driving the use of real-time payments. Thus, the percentage of companies that plan to start using this payment method starting next year exceeds other widespread options such as virtual cards, bank transfers or credit cards.
International transactions using conventional real estate techniques can be difficult, expensive and require additional documentation. However, with cryptocurrencies, transactions can be executed quickly and efficiently, regardless of the location of the parties involved. This simplifies the process for international investors.
Despite the advantages, there are limitations and obstacles to consider when using cryptocurrencies in real estate transactions. The volatility of cryptocurrencies is one of the main difficulties, as the value of cryptocurrencies can change drastically, making it difficult to estimate the true value of a real estate investment. Additionally, there are issues with the regulatory framework surrounding cryptocurrencies, which may sometimes be unclear. The slow adoption of cryptocurrencies in the real estate sector is another drawback, as only a small amount of cryptocurrencies are currently used in real estate transactions.
Cryptocurrencies have the potential to have a significant impact on the real estate market, offering advantages such as faster transactions, reduced fraud, and increased liquidity. However, there are limitations and obstacles, such as volatility and regulatory frameworks. The future of real estate transactions may involve a hybrid approach that combines the benefits of cryptocurrencies with traditional practices, ensuring efficiency, transparency and sustainability.
