New partnership opens door to crypto property loans

A partnership between bitcoin banking platform Ledn and crypto real estate broker Parallel will enable people to buy property in Cayman using cryptocurrency.

The deal between the two firms means real estate buyers can use their bitcoin or USD Coin cryptocurrencies as collateral for crypto loans from Ledn, which Parallel, as a cryptocurrency escrow provider with relationships with developers and real estate agents, uses to finance the purchase from property sellers.

Parallel handles conversion to fiat currency if either a buyer or seller prefers the option over a cryptocurrency payment. Meanwhile, Ledn’s portion of any transaction will be fiat-free, paid in either BTC or US dollar-backed stablecoins.

Ledn chief executive officer Adam Reeds said in a statement, “As both companies are regulated by the Cayman Islands Monetary Authority (CIMA) as Virtual Asset Service Providers, this partnership is a testament to the framework that the regulator has put in place to encourage the responsible development of the crypto industry in the Cayman Islands.”

According to its website, Ledn has a 50% loan ratio, and annual interest rate of 12.9%.

The companies announced their new partnership on 22 Aug., saying it would enable investors to finance and purchase real estate in Cayman using only their digital assets.

‘Golden Visa’

In their statement, the two firms said this would open up “a completely fiat-free way for crypto investors to buy real estate and qualify for a ‘Golden Visa’ – all without having to sell their crypto”.

The ‘Golden Visa’ refers to Cayman’s Certificate of Permanent Residence for Persons of Independent Means, which grants applicants who have invested a minimum of CI$2 million (US$2.4 million) in developed real estate the right to permanently reside in the Cayman Islands.

The companies’ statement notes, “In the Cayman Islands’ case, the fastest route to permanent residency is by investing at least US$2.4 million in real estate. Cayman’s real estate market is particularly robust and offers a wide range of properties to suit most budgets.

“With no restrictions on foreign ownership, no property, capital gains, inheritance or other recurring taxes, Cayman is already a jurisdiction of choice for foreign investors, who enjoy high returns on their real estate investments.”

Leveraging crypto assets

Explaining how the partnership works, the companies noted, “By leveraging their Bitcoin holdings as collateral for Ledn loans, investors will be able to then use them to purchase real estate through Parallel.”

Parallel, which is currently the only real estate cryptocurrency escrow provider that offers buyers and sellers the option of using bitcoin for property transactions in Cayman, brokered the first sale of a private home in Cayman using cryptocurrency last summer. That property sold for more than US$5 million, the company stated in a press release announcing the sale in September 2022.

CEO Laura Birrell said at the time, “We created Parallel to give crypto investors a legal and compliant means to convert their crypto gains into tangible real estate in one of the most sought-after destinations in the world.”

The company says that, since that sale, it has facilitated a slew of other property purchases, ranging in price from US$1 million to US$12 million.

“We’re thrilled to be partnering with the premiere crypto lender in the world, Ledn, to offer our clients an innovative financing solution,” Birrell said of the new partnership. “No longer will our clients have to decide between holding on to their crypto or purchasing that luxury property on Seven Mile Beach – now they can do both.”

Parallel was granted a Virtual Asset Service Providers licence from CIMA in February 2022, while Ledn received its licence in May this year. They are among 21 companies that CIMA has registered as VASPs since the Virtual Asset Service Providers Act came into effect in 2020.