China’s Nouveau Riche Use Bitcoins for Overseas Real Estate Purchases

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Members of China’s elite nouveau riche class are using bitcoins to dodge the country’s capital controls and channel funds towards overseas real estate acquisitions.

Last year Beijing ratcheted up China’s capital controls in order to stymie a exodus of funds driven by the overseas acquisition sprees of cash-flush Chinese companies, while also issuing a stern warning against “irrational” investment in foreign real estate.

China’s central government also cracked down on cryptocurrencies, with a ban on initial coin offerings followed by the closure of bitcoin trading platforms.

The measures have failed to diminish the enthusiasm of some Chinese tycoons for either overseas real estate or cryptocurrencies, with reports now emerging that many members of China’s nouveau riche class are combining their love of both for foreign investment purposes.

Shanxi province beef millionaire Guo Hongcai sold 500 bitcoins in the US in April, in order to raise funds for the purchase of a 100,000 square-foot mansion in California’s exclusive Los Gatos community.

“It’s very normal to sell bitcoin in the US,” said Guo to CoinDesk. “After selling bitcoin, you can just buy anything you want.”

Some of China’s millionaire crypto-enthusiasts are eschewing the sale of bitcoins for foreign-denominated funds, and instead using the cryptocurrency to make real estate purchases directly.

“We’re seeing that more and more people are willing to buy properties with cryptocurrencies because it’s getting easier to get their money out of the country using bitcoin, rather than establishing a bank account based in Hong Kong and getting their money out of the country using business channels,” said Natalia Karayaneva, CEO of crypto-powered real estate marketplace Propy, to CoinDesk.

Half of Propy’s roughly 50,000 monthly website views hail from China, with Karayaneva saying that the US and the UK are the most coveted destinations for real estate investment, and fintech meccas such as London or the Bay Area are especially well favoured by Chinese millionaires.

“They were mostly interested in residential properties next to good education…also, they want to diversify. They want to have parts of their assets abroad in more stable countries.”

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