After a turbulent year for the cryptocurrency industry, the waters have calmed down as banks and investors have recovered their interest in it.
Cryptocurrency still has its defenders as an alternative payment option, and real estate may be one of the beneficiaries. In recent times, cryptocurrency has made significant advancements in functionality, applications and security, and these developments have sparked interest across various industries, including real estate. Conventional real estate transactions can take weeks or even months to complete, while transactions involving cryptocurrency can be finished in minutes or hours. Transaction speed is one of the top reasons real estate firms cite when asked about their preference for different payment methods. That’s why one in five U.S. real estate companies are planning to use cryptocurrency for B2B payments next year, as per PYMNTS Intelligence data.
“Corporate Changes in Payment Practices: A Deep Dive Into the Real Estate Industry” is a PYMNTS Intelligence research study in collaboration with The Clearing House. The study is based on a survey of 125 executives at real estate companies in the U.S. and gathered information about the types of methods these companies use for their B2B payments.
According to the survey, checks, the automated clearing house (ACH), and same-day ACH are the industry’s most widely used payment methods. However, many companies actively seek newer, faster and more secure alternatives. Real estate firms are turning to cryptocurrencies for similar reasons that drive the use of real-time payments. Thus, the share of companies planning to begin using this payment method for next year outpaces other widespread options such as virtual cards, wire transfers or credit cards.
International transactions through conventional techniques in the real estate sector can be difficult, expensive, and require additional documentation. However, with cryptocurrency, transactions can be executed swiftly 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 deals. The volatility of cryptocurrency is one of the primary difficulties, as the value of cryptocurrencies can change drastically, making it challenging to estimate the genuine worth of a real estate investment. Additionally, there are issues with the regulatory framework surrounding cryptocurrencies, which can sometimes be unclear. The slow adoption of cryptocurrencies in the real estate sector is another drawback, as there is currently only a small amount of cryptocurrency used in real estate deals.
Cryptocurrencies have the potential to significantly impact the real estate market, offering advantages such as faster transactions, lower 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 cryptocurrency with traditional practices, ensuring efficiency, transparency and sustainability.