What are the 5 main difficulties encountered when purchasing real estate with crypto?
More and more cryptocurrency investors are looking to diversify their wealth by purchasing real estate. With the rise in Bitcoin and other crypto prices, the demand is very real.
But between the buyer's desire to pay in crypto and the seller's wish to receive euros, numerous obstacles can complicate the transaction. Volatility, regulatory compliance, banks' reluctance, scams… all these hurdles can jeopardize a sale.
For real estate agents and notaries, understanding these challenges is essential to avoid missing out on this rapidly growing market. Here are the 5 main pitfalls of crypto investments in real estate… and how Legibloq is innovating to provide solutions.
1. The conversion issue: buyers want to pay in crypto, sellers want euros
The main challenge in a real estate transaction involving crypto is the mismatch in expectations between the buyer and the seller:
- The buyer whish to pay in crypto.
- The seller wants to be paid in euros.
In between, the real estate agent and the notary must find a way to reconcile these seemingly opposing requirements while ensuring compliance and security for the transaction.
💡 The Legibloq Solution:
We ensure that sellers receive their funds in euros (via notaries' CDC accounts) while allowing buyers to pay in crypto through our escrow system.
2. The crypto volatility: a major risk to anticipate
In the world of cryptocurrencies, price fluctuations can be extreme: 📉 -15% overnight, -50% within weeks—it's not uncommon.
However, a real estate transaction takes several months between signing the preliminary contract and the final deed with the notary. During this period, the buyer’s crypto assets may lose significant value, jeopardizing the feasibility of the transaction.
💡 The Legibloq Solutions (at the investor's choice):
- Use of stablecoins (cryptocurrencies pegged to the euro or dollar) to hedge against excessive price fluctuations.
- Overcollateralization mechanism to ensure that when using more volatile assets, their euro value remains sufficient at the time of the final signing.
3. The compliance: a must for all real estate professionals
As a real estate professional, you are subject to the TRACFIN regulations, which require you to justify the source of the buyer's funds, whether in euros or cryptocurrencies.
Contrary to popular belief, cryptocurrencies are not anonymous: it is possible to trace their origin, but this requires specific tools and expertise.
💡 The Legibloq Solution:
Our solution relies on PSAN partners registered with the AMF, ensuring that the source of funds is verified and compliant with regulatory requirements. We support real estate agents and notaries throughout this process, eliminating any legal risk.
4. The banks: an unexpected obstacle
Relationships with banks can be complicated, both for real estate professionals and crypto investors:
- For real estate professionals, loan approval times are often too long, and in some cases, financing is denied, jeopardizing sales.
- For crypto investors, dealing with banks is even more challenging. Many banks remain reluctant to accept this new asset class, leading to account blockings or closures, fund freezes, or transfers rejection—even when originating from legally regulated and authorized platforms.
Imagine the scene: a buyer sells its crypto, transfers the funds to its bank account to pay the notary… and the bank blocks the transaction. The result? Enormous stress, delays, and possibly even the cancellation of the sale.
💡 The Legibloq Solution:
We enable direct transfer of funds in euros to the notary, eliminating the need for the buyers to go through their banks. Reliability and speed guaranteed.
5. The scam attempts: an ever-present risk
As with any technological innovation (internet, AI, crypto...), scams are never far behind. These range from classic frauds (identity theft, fake sellers, fake projects) to much more sophisticated schemes, sometimes involving forged documents or fake proof of funds.
For a real estate agent or a notary, handling a fraudulent case can have serious consequences: wasted time, damage to their reputation, or even legal liability.
💡 The Legibloq Solution:
Our team of crypto experts can detect and filter out suspicious cases early on, using advanced verification tools. We ensure that every transaction is legitimate, transparent, and compliant.
Crypto Real Estate: a promising market, but one that needs to be secured
Crypto investors represent a new, solvent target looking for tangible assets like real estate. However, these transactions require a strict approach to mitigate risks related to volatility, compliance, banking, and fraud.
With Legibloq, we have developed a turnkey solution that allows real estate agents and notaries to handle these transactions with peace of mind, without taking any risks or incurring additional costs, while ensuring secure payment in euros.
📢 Want to learn more? Contact us and discover how Legibloq can help you capture this new market easily and securely.
Pierre Papin
05/02/2025
(03/11/2025)
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