South African Property Company Starts Accepting Rental Deposits in Cryptocurrency

While most big companies and investors debate the need for regulatory oversight for the lucrative cryptocurrency trade, several small firms – like restaurant chains and online stores -- have already begun accepting payments in these virtual currencies. A South African property company has now become the first in the country to accept rental deposits in cryptocurrency. This is likely to result in potential benefits to tenants from an increase in the value of their crypto deposits.

Quorum Holdings says it is running a trial of the new business model for a residential project in Johannesburg, named Forest Views. Rentals there start at R 5,350 (roughly Rs 26,600) per month. The rental deposit will be held in Luno — South Africa's largest cryptocurrency exchange.

“Depending on how it works, we will expand to other properties in both Joburg and Cape Town,” its legal counsel Saul Mayers told Hypertext tech news website.

Mayers said that tenants can use Bitcoin or Ethereum to secure their leases. Using cryptocurrency will also be a sort of assurance for tenants as they would be knowing that the coins are held on a safe, trusted platform.

But what about the price volatility? Until the cryptocurrency value appreciates, it's okay, what happens when the price heads south? Explaining this situation, Mayers said the risk with the price volatility in the crypto business is always there but all gains are for the tenant when they leave the residence, with the landlord ready to shoulder possible losses. The legal counsel added that the typical tenants for Quorum Holdings are young professionals who are familiar with cryptocurrency and may want to use their holdings as a deposit instead of the standard deposit practice.

Bitcoin and Ethereum are the two most popular crypto coins. While the number of people trading in them has increased to an unprecedented level, very few institutional investors, including MicroStrategy and Tesla, have shown interest in them so far.