Buying a house with Bitcoins, what the rules say

Buying a house with Bitcoins: In Italy, the transfer of a real estate to cryptocurrency is to be qualified as a sale and not as an exchange. The Civil Code states that the debt arising from a sale generates a debt in currency and based on art. 1277 of the Italian Civil Code debts defined as pecuniary are extinguished with currency having legal tender in the State.

In the last two years, we hear more and more of cryptocurrencies as a payment tool for daily purchases. In the recent past, some consumers, reckless in dealing with a little-known field, have ventured into the purchase of goods of significant intrinsic value, such as luxury cars or valuable properties, using Bitcoin as a payment tool.

Consequently, as an evolutionary challenge to old payment methods, blockchain technology is scratching the “ancient” rules of trading, bringing an air of renewal and at the same time of uncertainty in the global payment landscape.

Cryptocurrency early adopters and traders have created copious wealth that they are also using to make real estate purchases, fueling a market with a traditional and static past.

There are several reasons why someone may choose to buy a house with Bitcoin, Ether or another cryptocurrency instead of making transactions with traditional forms of payment consisting of own means or money borrowed from credit institutions.

Precisely due to the intrinsic characteristics of cryptocurrencies it is possible to obviate the intermediation of banks, basing trust on the technology of distributed ledgers (DLT), i.e. the now known, albeit very often difficult to understand, distributed network that manages and records transactions in an unchangeable manner. in cryptoassets, governed by protocols such as the blockchain.

The market for cryptocurrencies used for the purchase of real estate: United Arab Emirates

In the world market of cryptocurrencies and real estate there are countries where these two elements are literally more at ease due to the intrinsic characteristics of the market and for legislation that favors and simplifies all the most innovative forms of investment.

Although the use of cryptocurrency has not yet become mainstream in Dubai and other Emirati cities, the seamless integration of cryptocurrency into the real estate sector is expected to revolutionize the future process of buying and selling real estate across the UAE and neighboring countries.

The best combination of cryptocurrency and real estate finds its best union through Bitcoin, leaving other famous cryptocurrencies such as those based on Ethereum or Ripple detached.

In this market, in fact, real estate investors consider Bitcoin the most popular currency for the purchase of valuable assets.

The first problem to consider and not to be taken for granted is that the purchase of properties with Bitcoin occurs when both parties (buyer and seller) are willing to exchange properties in cryptocurrency.

Cryptocurrency offers endless opportunities. An advantage is the ease of use comparable to cash. For this reason, many real estate companies in Dubai and other Emirati cities offer investors the ability to purchase properties through various types of cryptocurrencies.

Despite this, at the moment, it should be borne in mind that those who accept cryptocurrencies as a payment currency will sign the sale and purchase agreement based exclusively in dirham, ie the official currency of the UAE.

Hence, the real estate contract will not be signed on the basis of bitcoin but on the basis of the national currency. In order to facilitate the procedure, brokerage services have been set up, usually managed by credit institutions that facilitate this type of transaction.

Currently, Bitcoin Swiss (BTCS) is the preferred cryptocurrency service provider in the UAE and a major option for investors looking to go this route. Therefore, investors can buy properties for sale in Dubai via Bitcoin, with the transaction process, managed by Bitcoin Swiss.

One of the reasons for the advantage of using cryptocurrencies is the cost, in many cases lower than that of traditional payment systems imposed on international payments and transfers. Another important reason is the security of transactions because cryptocurrencies can be immediately transformed into legal tender coins (also called fiat), issued by national governments and regulated by the central bank.

Another important advantage of cryptocurrencies is the greater speed of accounting settlement. Thanks to the blockchain, in fact, it is possible to transfer the availability of digital currency from buyer to seller, giving the latter certainty of confirmation within an hour.

Buying a house with Bitcoins: sale or exchange?

Coming to evaluate the use of cryptocurrencies in our country, it is necessary to analyze the dynamics that within the Italian market can combine the cryptocurrency instrument with the role it plays, namely that of trading currency within the real estate market operating area.

The main issue in question relating to the transfer of a property with consideration in cryptocurrency is therefore that of establishing whether it is part of the sale or exchange.

A sale is the transfer of a physical or digital item against payment of a price normally paid in cash.

The exchange, on the other hand, is the contract that has as its object the mutual transfer of ownership of things, or other rights, from one contractor to the other. (Article 1552 of the Civil Code)

It is basically the classic barter, that is, the tool that in ancient times, when money did not yet exist or when its diffusion was not yet complete, was considered the main tool for the circulation of wealth within a community.

Leaving aside all the legislative considerations on the subject, it is possible to affirm, simplifying, that cryptocurrencies are to be considered as a sort of complementary currency and to conclude that the transfer of a real estate to cryptocurrency is to be qualified as a sale and not as an exchange.

It is now necessary to check whether the Civil Code allows payment of the price of a sale through non-legal tender currencies.

The debt arising from a sale generates a debt in currency and according to art. 1277 of the Italian Civil Code the debts defined as pecuniary are extinguished with legal tender currency in the State.

Cryptocurrencies as a complementary currency

It has just been stated that cryptocurrencies could be considered as a sort of complementary currency, that is, an instrument with which it is possible to exchange goods and services alongside official money.

Usually complementary currencies are not legal tender and are accepted on a voluntary basis, this contributes to their identity aspect, that is, to their identifying the community within which they are used.

A complementary currency system is in fact accepted and used within a group, a network, a community in order to facilitate and encourage the exchange of goods, the circulation of goods and services within that particular social network, compared to the rest of the community.

Complementary currencies are therefore placed as “systems of agreement” within a community and are used precisely for these purposes.

They promote long-term planning, stimulating participants to invest in related productive activities, rather than accumulating money, and encourage exchanges and cooperation with their membership network, through the circulation of the bargaining chip to which it is attributed. a value.

If from a purely civilian point of view, therefore, there are no obstacles to a sale with payment of the price by cryptocurrency, it is necessary to check whether other regulations are in force in Italy that may pose obstacles to use.

The anti-money laundering rules – Buying a property with Bitcoins

The first legislation that must be considered is certainly that relating to anti-money laundering.

The rules on anti-money laundering are intended to guarantee the traceability of payments and the certain traceability of the same to the person making them (identification of the beneficial owner).

The blockchain is a protocol that characterizes some architectures implemented on distributed ledgers (DLT), where the ledger is structured in blocks of validated transactions, concatenated to each other through the use of cryptographic techniques and distributed consensus mechanisms based on cryptoassets.

Therefore, if, from this point of view, cryptocurrency transactions are certainly traceable in an IT sense as they are registered on DLT, on the other hand, there is no doubt that the subjects who implement the transactions tend to be anonymous.

In this regard, the European Directive (2018/843) stated that: “the anonymity of virtual currencies allows their potential misuse for criminal purposes”. Furthermore, again the said directive, stated that the inclusion of exchanges and wallet providers in the context of the subjects required to comply with the anti-money laundering identification obligations is certainly an important start but cannot be considered as a solution.

The nature of cryptocurrency means of payment confirmed by institutional sources

Therefore, in light of the above, it must be concluded that cryptocurrencies are a potentially suitable medium of exchange for maintaining a store of value. Therefore, they can be considered as a complementary currency, not having legal tender, used as such by some subjects on a voluntary basis.

In support of this, the European Court of Justice also intervened (22 October 2015, C 264/14) in fact stated that “transactions relating to non-traditional currencies constitute financial transactions as these currencies have been accepted by the parties to a transaction such as alternative means of payment to legal means of payment and have no other purpose other than that of a means of payment “and that” the virtual currency with bidirectional flow “bitcoin” cannot be qualified as a material asset since this virtual currency has no other purposes in addition to that of means of payment “.

Even the Revenue Agency (res.72E / 2016) stated that virtual currency is an “alternative to the traditional one and its circulation is based on the voluntary acceptance by market operators who recognize its exchange value regardless of a legal obligation “.


Cryptocurrencies, therefore, will continue to develop and show promising results in the real estate sector.

Buying properties with cryptocurrency has the potential to reduce the time it takes to close a transaction; Furthermore, some cryptocurrencies (this is not the case with Bitcoin), can be used with smart contracts that could one day improve the security, transparency and efficiency of a real estate transaction.

The offer to accept Bitcoin as payment may provide sellers an edge among investors with substantial Bitcoin stakes and a desire to transfer those stakes into the real estate sector.

Engaging in such offers will require the seller and his representatives to understand the options for executing real estate transactions using Bitcoin and the various methods of converting Bitcoin into fiat money.

With such an understanding, as well as proper legal and tax planning, sellers can distinguish their listings and attract purchases using the billions of money currently held in Bitcoin.

Cryptocurrency Analyst

Founder of - IT- and Business-Consultant with a focus on Blockchain and Smart Contracts.

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