While readily admitting that I am not the world’s expert on the subject of Blockchain, I would like to acknowledge that I am starting to see a definite trend towards the employment of this software platform for digital assets within the real estate industry globally and stirrings of interest even within Cayman’s own real estate industry.
Incorporating the Blockchain techonlogy
As I explore how this new technology can be incorporated into our industry, I believe it offers an exciting world of possibilities because it delivers a completely secure environment for buyers and sellers to communicate with their agents/buyers in real-time, thereby potentially speeding up the buying/selling process from start to finish immeasurably. Buyers have to undergo a specific due diligence process so that well before they click the ‘Offer now’ button they have been fully scrutinized through multiple layers to ensure eligibility and that they are genuine and legitimate. One major proponent of Blockchain within the real estate industry is a company I have been working with for a while.
This offers real estate brokers and agents the chance to provide their customers with an end to end online offer process, which allows buyers with literally a click of a button, subject to due diligence checks, to make an offer on a property and to complete an offer agreement via Blockchain smart contracts. The process is also currently being rolled out for an end to end online leasing process, with renters and landlords soon being able to complete rental agreements via Blockchain smart contracts.
Down the line later this year, there will also be the possibility of cryptocurrency payment options for security deposits, rents and service fees, which is another exciting development in this area of technology, once jurisdictions get up to speed with the necessary legislation. The first in this field to have successfully implemented a platform of smart contracts to allow the real estate process to function in this way and the first to roll this technology out to real estate brokers and agents for the benefit of their clients. I believe this is a really big step for the industry and definitely an area of technology to watch and grow over the years.
Why we need to shout louder
Last December, it was announced that the Cayman Islands was not included on a list of 17 countries that the European Union deemed “uncooperative” in tax matters. But we did not get off scotfree, having been placed on a graylist of 47 countries and jurisdictions that have made written commitments to meet specific EU criteria to show we have tax transparency and “tax fairness”.
Even though this jurisdiction continues to deliver a robust and noted framework for the prevention of money laundering and other financial crime, the anti-offshore campaigns continue to come at Cayman from a variety of different angles. They are not new to Cayman and while they obviously impact the financial services industry, Cayman’s real estate industry also seems to get pulled into the discussion, as an industry that deals in the movement of funds on and off-island.
I believe this is an important issue that needs to be dealt with collectively, by all offshore jurisdictions working together as a single voice, explaining the need for an offshore financial services industry and fighting the propaganda that onshore seems to promote.
Cayman’s own Cayman Finance works towards addressing this issue, but I think more needs to be done. For far too long, this playing field has been heavily levelled in favour of offshore, with places such as Delaware, Las Vegas and Colorado all creating their own offshore financial services onshore. The impact on the real estate industry is felt when people tell me they would like to invest in Cayman real estate but are afraid to, given the misconceptions about the role of offshore.
Perceptions about what we do here are based upon misinformation and ignorance, so I feel it is important we do more to educate people about the value of what we do, and the fact that ordinary, everyday people in the U.S. particularly, benefit from having their pensions invested in a pension fund that invests in a Cayman Islands domiciled entity. Simply put, we need to get across that investing in Cayman funds is a good thing, not a bad thing and why.
Note: I would love to hear from you if there are any points of interest as they relate to Cayman’s real estate industry that you would like me to discuss in future articles, or if there are any questions you would like me to answer. Email: James.Bovell@bovell.ky