Blockchain and cryptocurrencies seem to be an inevitability. Many experts predict that the currency will become a standard form of payment, and it is already seeing increased use with hospitality and commercial real estate companies. Still, there is a lot of unknowns in the world of cryptocurrencies. We recently sat down with Samantha Ahuja, a partner at Morris Manning & Martin, to discuss the benefits of blockchain and cryptocurrencies and how hospitality and commercial real estate firms can leverage them today. While Ahuja declined to comment on the recent volatility that cryptocurrencies have seen in recent months, she does explain the benefits today and the long-term impact they can have on the market in this exclusive interview.
GlobeSt.com: What are the benefits of blockchain and cryptocurrencies in commercial real estate?
Samantha Ahuja: Cryptocurrencies in of itself would be another method of raising capital whether it be on the investor side or from guests and/or customers on the retail side. As cryptocurrencies become more mainstream and more widely held, the ability to accept or transact in cryptocurrencies will become more an expected payment or tender than as it may be thought of today. Many banks and large web-retailers are experimenting with their own version of a cryptocurrency and underlying value Cryptocurrencies represent only a limited use of the blockchain technology. The essence of blockchain technology allows for the existence of a digitized, distributable and immutable ledger that records and shares information with greater validation and security than other existing technologies. An additional added value from the blockchain is that it eliminates the need for middlemen and allows for peer-to-peer transactions to take place directly upon validation. The inherent features of blockchain result in the possibility of endless uses, some of which would directly benefit the world of CRE. Some of those benefits would include blockchain databases, which would be able to store and validate transactions such as the title searches and eventually the transfer of title. Blockchain databases would allow for large amounts of data to be stored on-line securely and even add a layer of transparency as these databases are created to verify transactions without the need for third party interaction. As an individually trusted platform, the ways in which blockchain can facilitate contractual arrangements using smart contracts could allow for users to transact without multiple requirements of data validation or third parties.
GlobeSt.com: Why haven’t these currencies been used by hospitality and commercial companies yet?
Ahuja: The use and acceptance of cryptocurrencies within organizations are growing rapidly, however, it is far from mainstream in its overall acceptance rate. Recently Expedia announced it would start to accept cryptocurrencies as a payment form. Arguably, Expedia and other OTAs may be trying to distinguish themselves and lure customers to booking on their site over another method. There are a lot of questions surrounding the tax treatment of cryptocurrencies domestically and abroad, as well as the ability to recognize and declare cross-border transactions. As these issues playout, more companies will find ways to lure customers with the benefit of an additional method of payment.
GlobeSt.com: What is your advice to companies that want to use blockchain and cryptocurrencies?
Ahuja: Like any emerging technology, the various possible uses for blockchain (not just limited to cryptocurrencies) should be explored. There are potential uses and benefits of blockchain as the technology matures. Those companies that are educating themselves and investing in talent who are on the cutting edge of such an emerging technology, could have an edge against their competitors in implementation on the customer facing side (i.e. accepting cryptocurrencies), back-of-house (supplier or vendor payments) and even in the space of direct customer transactions using ethereum or other similar technologies.
GlobeSt.com: What is your outlook for blockchain and cryptocurrencies in CRE this year, and how do you think they will impact the market in the long term?
Ahuja: In the short-term, there will probably be little movement in this space as is directly relates to CRE, however, I believe that as the technology matures and more uses are explored, CRE will benefit from the inherent traits of blockchain in increasing transparency, ease of transactions between willing parties and the ability to dissect customer data in a way that could result in more targeted outreach or beneficial use by customers/guests.