Cryptocurrencies are increasingly becoming more practical solutions for purchasing for individuals. From large transactions to smaller transactions, the banking, cybersecurity and supply chain management industries are only three of the many industries that cryptocurrency will transform the real estate sector, and in no small way.
What is Cryptocurrency?
Cryptocurrency is an internet-based medium of exchange (digital currency) which uses cryptographic functions to conduct financial transactions. Cryptocurrencies leverage blockchain technology to gain decentralization and transparency. There are different types of Cryptocurrencies such as: Bitcoin, Litecoin, Ethereum, Ripple etc. Cryptocurrency is slowly but steadily turning the wheels of the real estate sector and eliminating the high barriers of entry into the market. Unlike traditional currencies (Canadian Dollar and US Dollar), bitcoin transactions between buyer and the seller are directly between the two, without the need of a third party (financial institutions, clearing houses etc.)
Let’s look at why Cryptocurrencies are being used in the Toronto Real Estate market:
The problem of the traditional real estate market has been its barrier to entry for global investors. Some of these barriers include getting access to the financing, fund managers, the middle-man problem and the difficulty associated with cross border transfers. Through tokenization, cryptocurrency bypasses these blocks and creates a seamless process that allows investors across different regions, countries and economies to diversify their portfolio. Cryptocurrency eliminates the need for financial intermediaries, making it easier for global investors to invest in the Toronto Real Estate market.
International real estate investors spend lots of money in transfer fees, exchange fees, investment fees, attorney fees and taxes when purchasing their choice of property. This expensive process makes it less appealing for willing international investors as it can potentially hit their bottom line. As the cryptocurrency market develops and consumers become more aware of its potential, people in general will become more comfortable with them. Sooner rather than later, we expect to move towards modernistic living and the real estate industry is moving along with the trend. Ultimately, more industries will adopt the concept of decentralization, thereby ensuring simple, direct and seamless transactions.
Using Cryptocurrency to purchase Toronto Real Estate
Before you are looking at random houses on the Toronto real estate market, you first have to find customers that are willing to partake in crypo-transactions. One of the more commonly used and most famous cryptocurrency is Bitcoin which is currently being used in the Toronto Real Estate market. You have to find a real estate brokerage that conducts transactions in Bitcoin. Once your offer is accepted by the seller of the property upon receiving a deposit or a full amount of the property value in Bitcoin, the brokerage will issue the funds in Canadian dollars to the seller’s brokerage trust account. From the point of view of the seller and the seller’s brokerage, the process is more seamless than the typical Canadian Dollar transaction.
Although a lot of individuals are hesitant in using a digital currency, we have to realize the way the world is embracing it. Recently Paypal, has announced that “To increase consumer understanding and adoption of cryptocurrency, the company is introducing the ability to buy, hold and sell select cryptocurrencies, initially featuring Bitcoin, Ethereum, Bitcoin Cash and Litecoin, directly within the PayPal digital wallet”.
WIth the largest online merchant provider embracing Cryptocurrency, we believe that cryptocurrencies will continue to grow in being more actively used in the Toronto Real Estate Market.