How to Buy Real Estate in the EU with Crypto

The question of buying expensive real estate or making large purchases in Europe using cryptocurrency is one of the most mysterious topics, which is impossible to find adequate information about online. Although crypto itself is legal in Europe, the main difficulties arise when interacting with conservative European banks.

Oleksiy, who works in the Financial Technology (FinTech) sector in Poland, explains how his company Xpaid offers a legal, real, and convenient solution for Ukrainians and Europeans who hold crypto assets.

Distrust of banks and illegal schemes

European banks still have an extremely conservative attitude towards digital assets. In Poland, for example, banking structures often equate crypto with “arms and human trafficking.” This creates enormous problems for people trying to legalize their funds:

• Risk of Blocking

If a client exchanges a large amount of USDT for euros through P2P or Binance and sends them directly to their account in a regular bank (e.g., Santander), the bank may block these funds for years, requiring documents that they themselves do not know how to handle.

• Cash and border issues

If a person exchanges crypto for cash and tries to deposit it into a bank, or if they transport large sums of cash without declaring it at the border, these funds are considered illegal in Europe, even if their origin was in Ukraine (e.g., selling an apartment without declaring it at the border).

It is worth noting that transactions below 300,000 euros within the European banking network are generally not scrutinized as closely, although they may be subject to random checks.

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Solution – use of offshore jurisdictions

Xpaid, with five financial licenses (three of them for crypto), bypasses the conservatism of traditional banks by using crypto-friendly payment institutions, primarily based in Lithuania, Malta, Great Britain, or Switzerland.

Lithuania is used as a key jurisdiction because it is one of the most friendly and progressive in Europe regarding the regulation of crypto operations.

Scheme for legalization of funds and acquisition of real estate:

1. Crypto exchange

Xpaid, holding a Lithuanian license, can legally exchange any amount of cryptocurrency (USDT, Bitcoin, etc.) for euros with the issuance of an official contract and invoice. This is possible because Xpaid is a full-fledged financial company.

2. Opening a “friendly” account

The client opens an account with a chosen payment institution (hereinafter referred to as the “transit bank”), which is crypto-friendly. A payment institution (PI) differs from a full-fledged bank: it is licensed to handle client funds but is more flexible and diversifies risks for partner banks.

3. Transaction

Xpaid transfers the exchanged euros to the client's account at this payment institution. This account is not blocked.

4. Final transfer

The client independently transfers funds from their account in Payment Institution to an account in a final bank (e.g., Santander or Millennium). For the final bank, this payment appears as a regular “Personal Transfer” or “SEPA payment” from another European bank, so it is not perceived as risky.

The entire process, from the beginning until the funds arrive in the client's account from which the property can be paid for, takes about a week.

Key element - Know Your Customer/Anti-Money Laundering (KYC/AML) verification.

Despite the legality of the exchange, Xpaid, as a financial company, must verify the origin of cryptocurrency and client funds. They do not create legality, but merely legally exchange already legitimate assets.

• Identity and wallet verification

A KYC (Know Your Customer) procedure is being carried out with checks against restricted databases (e.g., Interpol). The client's crypto wallet is analyzed for cleanliness. If the crypto is “dirty” (involved in illicit transactions), the system shows a percentage of contamination, and the company will not accept such a resource.

• Structuring income

The company helps the client structure their income (dividends, sale of apartments/cars, business income), which can be in Ukraine as well as in Europe. This helps avoid problems with Polish banks: the client shows that they bought crypto in Ukraine (with income) and sold it there, and only transported “in crypto” (USDT) across the border.

• Tax risks

Using stablecoins (USDT), which are not volatile, allows the client to avoid capital gains taxes (as would be the case with appreciating Bitcoin). Instead, “loan” schemes carry high tax risks in Poland, specifically the PCC tax (tax on civil law transactions), the non-payment of which can result in the client facing a tax surcharge of up to 20%% of the entire amount after 4-5 years.

Use for Business and the Future of Finance

This same structure can be used not only for acquiring real estate but also for contributing funds to the share capital (charter capital) of European companies (for example, Polish Sp. z o.o.).

The process of contributing to the charter capital: 

Crypto -> Xpaid Exchange -> Account in Lithuania (PI) -> Individual Customer Account in Poland -> Company Account (share capital).

This minimizes questions from the Polish bank, as the transfer to the company is made from a legitimate Polish individual account.

Trends in the financial world

The financial world is moving towards specialization and embedded banking:

• Banks will become custodians of funds, responsible for their safekeeping.
• Specialized FinTech companies and entrepreneurs will create customer-centric products. For example, a company might issue its own cards for an audience (like Starbucks, which created a wallet for accumulating liquidity).
• The entry barrier to the financial business is decreasing (at the start, it can cost as much as opening a restaurant, around 100,000 euros).

Regarding crypto, MiCA regulation, adopted on June 30, will unify European rules over the next two years. According to MiCA, USDT will be gradually replaced by stablecoins with 100% reserve backing, such as USDC.

Xpaid services include exchange, account opening, transaction approval, and communication with payment institutions, with a base commission rate of 4% of the amount, although it can vary depending on the case complexity and client's jurisdiction.