Buying property with crypto without cashing out
Short answer
Three routes avoid selling. You can borrow against your holdings with a crypto-backed mortgage and buy with the loan, which keeps your position but adds liquidation risk. You can pay a seller directly in crypto where they will accept it, which is rare and jurisdiction-dependent. Or you can buy an asset that is itself denominated onchain, such as a property whose LLC membership is a single token bought with USDC, where no conversion happens at any point.
Borrowing against your holdings
Crypto-backed mortgage lenders will finance a US purchase against Bitcoin or Ethereum collateral, in some cases up to the full price. You keep the upside of the collateral and you have not disposed of anything.
The risk is the obvious one and it is severe. If the collateral falls hard you face a margin call: post more or be partially liquidated, possibly at the worst moment in the cycle. A leveraged position against a volatile asset securing an illiquid one is a specific kind of dangerous.
Paying a seller directly
Some sellers accept crypto directly, and some jurisdictions have built around it more than the US has. In practice, in the US, even a crypto-accepting seller usually receives dollars because escrow and title want dollars.
That means a conversion, which means a disposal, which is what you were trying to avoid.
Buying something already denominated onchain
If the asset itself is a token, there is nothing to convert. On USDC Homes a property is held by an LLC whose entire membership is one indivisible token, priced and settled in USDC.
You are still swapping one asset for another, which has its own tax treatment wherever you are. What you are not doing is exiting to fiat, waiting on a wire, and hoping escrow clears before your rate lock expires.
A word about the tax
Avoiding a sale is not the same as avoiding tax. Swapping USDC for a token is a disposal of the USDC in many jurisdictions, and borrowing against collateral has its own treatment when the collateral is liquidated.
Nothing here is tax advice. The rules differ by country and by your own circumstances, and the cost of asking someone qualified is trivial next to the cost of guessing.
Common questions
Is swapping USDC for a property token a taxable event?
In many jurisdictions yes, because you have disposed of the USDC. The treatment varies, and this is a question for a tax adviser in your country rather than a rule of thumb.
What is a crypto-backed mortgage?
A loan secured by your cryptocurrency rather than by your income or credit file, used to buy property without selling the collateral. If the collateral falls in value the lender can require more or liquidate part of it.
Can I use Bitcoin instead of USDC here?
Orders on USDC Homes are quoted and settled in USDC. Converting another asset to USDC first is a disposal of that asset.
Sources
- Binaryx: four ways to buy real estate with crypto
- Yahoo Finance: what to expect buying a house with cryptocurrency
Keep reading
How do you buy a house with USDC?
There are two very different things people mean by buying a house with stablecoins. One converts your USDC to dollars before closing. The other never converts at all. The difference decides how long it takes and who has to say yes.
Can a foreigner buy a house in the USA?
Yes. There is no citizenship, green card or visa requirement to buy US residential property. What actually stops most foreign buyers is the payment rail, the financing and the tax withholding, not the law on ownership.