You can now buy homes in Dubai using bitcoin, but officials in the city have raised concerns about the use of cryptocurrencies. The real estate project, claiming to be the first of its kind in the world, could have a major impact on the future of virtual money. Nawied Jabarkhyl reports.
It's "a fraud" that will eventually "blow up". That's what JP Morgan boss Jamie Dimon thinks of bitcoin. But, the virtual currency has had a major boost in its efforts to go mainstream. This is the first property development to be sold in the currency. The $325 million Aston Plaza is being built at Dubai Science Park. (SOUNDBITE) (English) BARONESS MICHELLE MONE, PARTNER, ASTON PLAZA SAYING: "We cannot ignore this market. It trades at half a billion pounds (GBP) a day. And, astonplazacrypto.com really wants to tap into this community and take their investment and turn it into bricks and mortar." The way it works sounds relatively simple. Buyers can log onto a website and buy an apartment using bitcoin, which will be immediately converted into U.S. dollars. That reduces the risk of volatility, which has become a notorious feature of the digital funds. But, for most of us, bitcoin remains clouded in mystery. That's why Dubai's financial regulator has released a statement this week, warning people about the dangers of cryptocurrencies." The Dubai Financial Services Authority says it views any investments linked to virtual money as high-risk, and that it doesn't regulate such products. Legal experts - who've been tracking the rise of the industry - say rules need to be put into place. (SOUNDBITE) (English) SALLY SFEIR-TAIT, GLOBAL HEAD OF FINTECH, CLYDE & CO. SAYING: "Clarification in that field should come in writing and it should come in the form of regulation - so that would help it." There are wider concerns too. Without a physical transaction, crypto-funds may be harder to trace. Aston Developments says any deal will be governed by Dubai's existing property laws. It's also planning similar projects in the future, designed to tap in to bitcoin's rise. This development is set to be completed by late 2019. By then, virtual currencies may be a more common feature of our lives. But if this year's anything to go by, expect plenty of ups-and-downs in their value along the way.