Author: Weilin, PANews
Purchasing real estate with cryptocurrency is becoming the choice of more and more American homebuyers. In the last round of the 2021-2022 bull market, according to a survey by the US real estate trading platform Redfin, about 11.6% of first-time homebuyers in the United States said in the fourth quarter of 2021 that selling cryptocurrency helped them pay the down payment for the property, a significant increase from 9% in the third quarter of 2020.
Based on this trend, on October 24 this year, Propy, a star real estate project in the RWA track, launched a cryptocurrency third-party custody service based on the Coinbase Prime platform and services to solve the troubles of up to 11.6% of real estate buyers. At the same time, Propy also announced the launch of the highest reward event in the history of Coinbase Wallet.
Launch of Coinbase Prime-based cryptocurrency custodian service
Cryptocurrency escrow is a method of securely holding cryptocurrency during a transaction. The escrow provider acts as a neutral third party, ensuring that the buyer and seller fulfill their respective obligations before the funds are released. This adds an extra layer of security and trust to high-value transactions, such as home purchases.
This type of custody has several advantages. First, Propy’s crypto custody service allows homebuyers to avoid having to convert their cryptocurrencies into fiat currency early on, thereby avoiding triggering capital gains taxes and the risk of having to repurchase crypto assets if the transaction fails.
Specifically, if a homebuyer holds Bitcoin, they can now securely place it in escrow through Propy's licensed title escrow service, conduct real estate transactions, and only redeem it when the transaction is completed. This avoids unnecessary fees and taxes and is also a typical use case for Bitcoin and other cryptocurrencies to be used in practical applications associated with real-world assets (RWA). This escrow service can support BTC, USDC and ETH.
By deferring the exchange, buyers can potentially reduce their tax liability. Considering that crypto gains are taxed at rates ranging from 10% to 37% depending on income bracket, this can result in significant cost savings. For example, without crypto escrow, John exchanges 10 Bitcoins for $500,000 at the outset of the transaction, but the Bitcoin price rises to $55,000 on the closing date, causing him to miss out on $50,000 in potential gains and potentially face capital gains taxes. In contrast, when using Propy’s crypto escrow service, John’s 10 Bitcoins are held in an escrow account. On the closing date, Bitcoin is worth $55,000, and only 9.09 Bitcoins need to be exchanged to reach $500,000, allowing him to keep 0.91 Bitcoins (worth $50,000). In addition, John can defer any capital gains taxes until the cryptocurrency is actually exchanged for fiat. This simple example shows how Propy’s escrow service protects buyers from market fluctuations.
In addition, crypto assets are securely stored in custodial accounts through Coinbase’s trusted custody solution during the transaction process on the Propy platform. Coinbase Prime’s quarterly institutional trading volume exceeds $130 billion, ensuring strong liquidity.
Propy's escrow service also provides 24/7 support, fully demonstrating the powerful influence of the 24/7 operation of the crypto market. Michael Casey, chief content officer of CoinDesk, said in X Space of Propy's escrow service announcement, "In real estate transactions, many people have experienced the pain of having to deal with tedious matters during normal working hours, but this is a personal transaction, not my job. Therefore, being able to trade on weekends, at night, or at any time eliminates friction in the process and gives people greater flexibility. This convenience will encourage industries to create more value, thereby driving innovation and development in the market."
Regarding the latest developments, Propy CEO Natalia Karayaneva said in a statement announcing the news that Propy is committed to improving the security of traditional home sales. "The advantage of Propy's crypto escrow service is that it can protect funds during the closing process, providing unprecedented security for buyers and sellers," she said. "As the first licensed title company operating in the crypto space, we are committed to providing a seamless and secure closing experience. With Coinbase's trusted custody solution, we add an extra layer of security to ensure that funds are safely held during the final stages of the transaction."
$1,000 PRO referral reward, Propy launches the highest reward event in Coinbase Wallet history
At the end of October, Propy also announced a referral program based on Coinbase Wallet, which offers $1,000 worth of Propy tokens PRO. If a user has a friend who is buying a house and they use Propy's crypto escrow service, they will receive $1,000 in PRO tokens.
Anthony Bassili, head of asset allocation and tokenization at Coinbase Institutional, said they are working closely with various teams building Web3 enterprise stacks. He pointed out that the network has been well calibrated, the application layer connects many excellent use cases, and enterprise use cases are beginning to emerge in major industries such as real estate. Anthony said, "Thanks to the Propy team for building on Base and using the Coinbase wallet, and extending it to Coinbase custody services, this is the cooperation model we look forward to. Coinbase is building infrastructure so that developers can easily build in its ecosystem to drive the transformation of traditional industries."
In addition, Anthony revealed that they are working with multiple protocols to integrate services, especially in the real estate sector. "Coinbase Institutional is a qualified custodian in the United States regulated by the New York Department of Financial Services. Our responsibility is to ensure the security of assets and to ensure that technology serves individuals and institutions that use these assets. This is a huge opportunity."
RWA real estate track trend: property history has been put on the chain, and real estate loans may be mortgaged with cryptocurrencies in the future
In the RWA real estate track, Propy found that with the development of the RWA trend and the advancement of blockchain infrastructure, it has become easier for Propy to establish partnerships with traditional real estate industry players.
At the same time, multiple case studies and surveys show that the new generation prefers to store funds in cryptocurrencies and real estate. This shift reflects their emphasis on financial innovation and asset diversification, which means that these two assets will play an increasingly important role in the future economy. As market conditions change, asset portfolios that can be converted into each other may provide investors with greater flexibility and opportunities.
Propy has spent years working with multiple data providers on data integration, and more recently, thanks to upgrades to second-layer solutions like Base, both title history and lien history are now available on-chain, providing greater transparency into transactions.
In addition, Propy is in discussions with traditional lenders willing to launch proof-of-concepts and first crypto holder loans, and is in dialogue with major crypto lending platforms. These developments mark the gradual deepening of blockchain applications in the real estate sector, driving the industry's transformation towards digitalization and innovation.
Jake Brukhman, founder and CEO of CoinFund, said at the X Space held by Propy that 2024 is seen as a key year for institutional adoption of blockchain and digital assets, and multiple data indicate this trend. Earlier this year, Gary Gensler, chairman of the U.S. Securities and Exchange Commission (SEC), approved the Bitcoin ETF, followed by the Ethereum ETF in the summer. At the same time, large Wall Street companies such as Blackrock, Franklin Templeton, and Fidelity have entered the crypto field, driving the maturity of the market. In addition, the rise of tokenized projects and stablecoins has also paved the way for integration with real-world assets (RWA), further promoting the development of this field.
