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| View of a beach from a condo building in Florida, where bitcoin fever has hit the real estate market (AFP Photo/Jose ROMERO, RHONA WISE) |
Miami (AFP)
- Bitcoin fever has hit the US real estate market, especially that of Florida,
offering foreign investors a way to dodge currency controls at home and US
economic sanctions.
As of the
end of last year, the digital currency was listed as a way to pay for some 75
properties for sale, especially in south Florida and California, according to
the real estate firm Redfin.
"Bitcoin
accepted" is a message now seen in the description of homes for sale in
the Miami area.
One seller
is going even farther, saying he will take only bitcoin (33 of them to be
exact) for his half-million-dollar downtown condo in the Florida metropolis.
Bitcoin has
been on a roller coaster ride of late, shooting up to nearly $20,000 a piece in
mid-December and then dropping sharply around Christmas. It started the year at
around $14,000.
Its use in
real estate transactions is novel, and agents are wary because of its high
volatility.
"I'd
be blown away if a year from now we see hundreds of real estate transactions in
bitcoins," said Jay Parker, Florida CEO for the Douglas Elliman brokerage
agency.
Still, such
transactions can be useful for foreigners who want to invest in the United
States and cannot otherwise do so, said economist and bitcoin expert Charles
Evans of Barry University.
"This
seems to be driven by international investors who are circumventing inefficient
banking and currency controls at home, and by US cryptocurrency
enthusiasts," Evans told AFP.
"The
governments in those countries restrict the amount of money that their residents
are allowed to transfer abroad through the banking system. Bitcoin enables
individuals there to bypass such restrictions," he added.
This could
be a draw for investors, who even before the bitcoin rage were already hot on
the real estate market in south Florida.
Nearly half
of all foreign buyers of property in south Florida are from Latin America.
According
to the National Association of Realtors, over the past five years, investors
from Venezuela, Brazil and Argentina -- in that order -- have led purchases in
this part of the state.
Money
laundering?
Bitcoin
offers another advantage for some foreign investors: it lets them dodge US
economic sanctions.
Evans cited
the example of Venezuela, which imposes strict currency controls and is
enduring runaway inflation that surpassed 2,600 percent in 2017.
What is
more, many senior officials in the government of Venezuela's President Nicolas
Maduro have been hit by sanctions imposed by Washington, which considers his
administration a dictatorship.
Evans said
there is also a lot of interest in bitcoin among Iranians, whom he described as
"doubly hit" with restrictions in Iran and international sanctions.
It is an
open secret that money laundering fuels the real estate market in south
Florida. But instead of hiding the practice, bitcoin could have the opposite
effect.
The crypto
currency "is a terrible medium for large-scale money laundering, because
all bitcoin transactions are recorded in the publicly available transaction
record known at the Blockchain," said Evans.
Although
bitcoin has been associated with the drug trade and cyber attacks, Blockchain
"leaves a lot of fingerprints," former Florida representative Jose
Felix Diaz told Politico.
"So if
you're using it for illegitimate reasons, the state and the federal government
should have every tool at their disposal to go after you," Diaz said.
Last year,
Diaz sponsored a bill-turned-law that includes bitcoin in Florida's laws for
fighting money laundering.
Real estate
agent Parker also said money laundering via bitcoin is far from posing a risk
because "the beneficial owners of the real estate are always going to be
able to be traced."
Parker said
the fad of doing real estate deals in bitcoin could be as volatile as the
currency itself.
"I
think it's a gimmick. There's not much risk. The only risk is if the currency
crashes before you can liquidate it," said Parker.
"I
think the people that are using bitcoins to try to market their properties are
doing it with the very purpose of getting you to write about it, getting their
properties exposure," said Parker.
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