In recent months, Uruguay has been open-minded about the application of cryptocurrency in the country. The latest suggestion by the Uruguayan regulator that will pave the way for the use of crypto in real estate comes just a month after Juan Sartori filed a bill with the senate that seeks to legalize digital assets. While the bill did not mark any crypto as a legal tender, it sought to introduce a regulatory framework due to the increased adoption.
The question concerning the use of crypto for real estate transactions arises due to the increasing number of dedicated portals in the country posting properties on sale for cryptocurrency. Other asset providers have also joined the movement and are accepting crypto payments in exchange for assets.
Uruguay financial regulator made a statement to express its views on using crypto for asset sales. In the statement, the regulator suggests that using cryptocurrency to purchase real estate is possible in certain circumstances. For instance, the regulator will not treat the transaction as a traditional sale of a property but as an asset exchange since a tangible asset (property) is sold for an intangible asset(crypto). At first glance, the transaction may seem illegal since money must change hands and digital tokens aren’t legal tender in the Latin American country.
However, digital currencies still have legal status despite being intangible assets since they fulfil some of the money properties. Hence trading a real estate asset for bitcoin or ethereum is considered a legal transaction.
The regulator also noted that crypto-real estate exchanges are still taxable transactions, and the buyer and seller must remit the necessary taxes based on the value of cryptocurrency. Besides, the properties purchased ought to be registered with the land registry, and transfer of ownership documents must be filed with the relevant authorities.