China Blockchain Research
Chinese can now buy property with Bitcoin
Bitcoin acceptance in China has now extended into real estate with a residential developer in Zhangjiang Hi-Tech park in Shanghai finding a new way to promote sales through the acceptance of Bitcoin virtual currency.
Shanda Group, one of the large IT giants in China, through its real estate development arm, opened sales of its first real estate investment project on October 25th, 2013. 300 apartments in the soon to be built buildings ranging from 42-81sqm were available for sale and sold out in a few minutes as demand far outstripped supply.
Here's to a happy prosperous buying future with Bitcoin
As part of the promotion, Shanda accepted Bitcoins for payment. Although the exchange rate was ‘fixed’ at 1,000 Chinese Yuan (CNY) to one Bitcoin and the developer reserved the right to adjust the rate, the deal represents one of the first times that Bitcoin could be used for such a large scale 'public' purchase. The exchange rate was about 1,200 CNY : 1 Bitcoin on BTCChina that day, so the developer was obviously trying to hedge a bit in case Bitcoin fell through, but considering the rate is rapidly reaching nearly 2,000 CNY : 1 Bitcoin, it would have been a great deal for the developer – Bitcoin is one of the few investments in China that has been increasing faster than real estate in 2013.
The program was specific for the Zhangjiang Hi-Tech park as there are, as you would expect, a number of high-tech companies in the zone with younger workers would presumably be more aware of and in-touch with Bitcoin. The advertised price for the apartments was between 21,000-28,000 CNY / sqm, which is roughly what you might expect, if not a bit cheap.
The current run-up in the price of Bitcoin is an indicator of the interest in the currency, but is likely largely due to speculation. However, examples like this property development show how Bitcoin could be used for non-speculative purposes in nearly every industry. Regular bank transactions to pay for property would typically involve a stack of paperwork and likely a solid afternoon in the bank. With Bitcoin, the transaction could be completed in minutes.
China Bitcoin payments developing gradually
In our previous commentary, we looked at the future of Bitcoin in China and its potential to become a widely adopted and used virtual currency. One aspect of its development which will be critical if the fledgling currency is to really gain traction is the maturation of Bitcoin as a transaction platform.
Will Bitcoin take off in China?
In February 2013, China became the second largest active Bitcoin market globally as measured by wallet downloads. This has attracted new Bitcoin based businesses to China and what could be a massive market for the developing virtual currency. An example is Bitfash, which was launched in April 2013 and became the first online shopping platform for clothes to accept Bitcoin as payment; one of its key target markets is China. However, will Bitcoin really take off in China? Can the Chinese consumer shift the value of the virtual currency as they did with gold earlier in 2013? What will the government eventually inevitably do to control the currency? It could be a potentially huge market, but will largely depend on its payment function development, the attitude of the Chinese government and the stability of Bitcoin's value.