Lingerie entrepreneur Michelle Moe and her business partner Doug Barrowman have launched what they believed to be Dubai’s first bitcoin priced development. The overall project spans a staggering 2,400,000 ft.² and the first tranche of 150 apartments will be sold in bitcoins. Each apartment will have a starting price of 30 BTC which at the current rate equates to around $133,918.
Aston Plaza and Residences
As we touched on above, the overall project will take in 2,400,000 ft.² spread across two 40-storey residential towers. The backers are making a big splash about the bitcoin element of the investment which is certain to grab headlines but is this really the way forward?
The project in total is worth around £250 million and Michelle Mone will be using her interior design skills to create walkways and reception areas. While this is the first time she has been involved in this size of project she is familiar with the Dubai area. The fact that she was appointed to the House of Lords by David Cameron is also being highlighted to show the use of bitcoins is not “dodgy” in the words of Michelle Mone.
Dubai real estate
It will be interesting to see the level of interest in this Dubai project which is certainly adventurous although unfortunately the bitcoin element has rather taken the focus away from the underlying development. If you do a quick check on Dubai real estate you will see many mixed opinions at the moment. On one hand some observers believe that Dubai real estate is “feeling the heat” while others believe it is a buying opportunity. There is also focus on a weaker dollar which many believe also bodes well for the Dubai real estate market.
While bitcoin is by far and away the best known of the so-called digital currencies available today there are serious concerns about money-laundering and criminal activity using digital currencies. The way in which these currencies are set up makes it extremely difficult to find the underline customer if they wanted to remain anonymous. Obviously, regulators around the world are already onto this issue and while their direct control of the currency is limited they can exert some control over finance companies and those involved in real estate.
When you bear in mind the recent volatility of digital currencies such as bitcoin we can only assume there is an immediate exchange into a more recognised currency when purchase proceeds are received. The longer the developers retain the bitcoins the more “at risk” they are to the markets which have been fairly volatile. Double-digit swings in the exchange rate of bitcoin to the dollar are not uncommon so it will be interesting to see the finer detail of the bitcoin settlement system for this project.
A sign of things to come
There is no doubt that digital currencies will play a greater role in the worldwide economy going forward. There are still regulatory issues to address, and volatility is a major problem at the moment, but in due course we will see some mass market digital currencies emerging. Bitcoin is one of the better-known digital currencies and in a market where reputation means everything the company has a head start on its competitors.