The crypto rich and Dubai real estate: A connection underpinned by innovation, geopolitics, and stability
The Russia-Ukraine war is not only affecting the lives and finances of the citizens of the two countries, but it is also having a deep impact on various sectors of the global economy. A notable offshoot has been the flight of wealthy Russians to safe havens such as Dubai. And the crypto-rich among them are increasingly turning to real estate investments in the oil-rich city. Crypto firms in UAE are getting many requests to liquidate billions of dollars of virtual currency as well-off Russians look to safeguard their financial interests.
Dubai, the Gulf’s financial and business centre and a growing crypto hub, has long beckoned the world’s uber-rich. And the UAE’s refusal to take sides between Ukraine and Russia has given ample reason for rich Russians to bet on Dubai. As it stands, the UAE and Russia’s long-standing history and the former’s neutral stance on the ongoing conflict have emboldened Russians to make Dubai their preferred destination for investing their money. Dubai has always been an attractive tourism destination for Russians, who have been among the top visitors and buyers of local real estate even before the war.
The conflict has now led to an increase in the rate at which Russian wealth is flowing into Dubai’s real estate sector. Real estate companies in Dubai are increasingly closing property deals through cryptocurrency payments, and the trend is likely to continue because cryptocurrency has sped up the process and cut out the middlemen.
Asset digitalization firms, working with custodian banks, convert the digital currencies into fiat currency, which is then sent to the real estate developer. Not only is this cutting downtime, but it has also obviated the need for property buyers to visit Dubai physically to scout for property and make the down payment. Cryptocurrency can be transferred in minutes and it attracts a negligible fee in comparison to payments through banks, which can take days and cost much more.
Crypto, real estate and Dubai – The perfect trifecta
Dubai’s real estate was on a firm footing even before the Russia-Ukraine war broke out. With the sector picking up pace in the past couple of years, it was already on global investors’ radar. The geopolitical situation and the new law formulated by UAE to govern virtual assets have given a further impetus to the industry.
On March 11 this year, the Emirate of Dubai formalized the Virtual Assets Regulatory Law, which is all set to lay the foundation for creating a regulated ‘onshore’ industry for virtual assets in Dubai. As per the law, a new body, the Virtual Assets Regulatory Authority (VARA), has been set up to regulate, supervise, and control virtual asset services. This is bound to lead to an increase in investments by companies already in the crypto industry.
And with property developers increasingly accepting cryptocurrency as payment for real estate assets in Dubai, major disruption is on the cards, with the property sector set to benefit enormously. The UAE has already been adopting a favourable attitude towards blockchain and cryptocurrency businesses, and the new law will further solidify the reputation of Dubai as the destination of choice for investment in real estate.
The inherent attractiveness of the city’s property market, the overall stability that the UAE promises, the new law governing virtual assets, and the existing global geopolitical situation – this heady mix means crypto millionaires and Dubai’s real estate sector can look forward to happy times in the happy city.
