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Accepting cryptocurrency as payment for off-the-plan units

An article by Stella Lee, a Partner in our Brisbane office.

With the use of cryptocurrencies becoming increasingly prevalent and intertwined with our daily lives, it is unsurprising that cryptocurrencies would play a role in the property and strata sector.

After all, if you can use Bitcoin to pay for your coffee, why not pay for an apartment?

However, a closer consideration of the legal implications reveals a potential issue which may arise for property developers who accept payment by cryptocurrencies for off-the-plan units.

Amongst the many undetermined and unregulated areas of the application of cryptocurrencies (as far as the legal industry is concerned), the issue of whether a property developer’s acceptance of cryptocurrency as payment for off-the-plan strata lots would, in turn, deem the sale contract an instalment contract under the Property Law Act 1974 (Qld) is one of the topics that caught our attention.


What is an instalment contract?

A contract becomes an instalment contract within the meaning of Division 4, Part 6 of the Property Law Act 1974 (Qld) if the purchaser is bound to make a payment or payments (other than a deposit) without becoming entitled to receive a conveyance in exchange for the payment or payments.[1] The deposit must not exceed 20% of the purchase price for the sale of a proposed lot.[2]

The process from payment with crypto to payment of purchase price

A typical transaction from a payment using cryptocurrency to a receiver of the payment in fiat currency involves the following generalised steps:

  • Transfer of the digital coin from the payer’s cryptocurrency wallet to the receiver’s cryptocurrency wallet.
  • Converting the cryptocurrency into a fiat currency, such as the Australian dollar, via an exchange service provider.
  • Depositing the Australian dollars into an account with a financial services institution (i.e. stakeholder’s bank account).

In a transaction where the payment of purchase price for an off-the-plan strata lot or apartment is made using any type of cryptocurrency, there is the inevitable gap between receiving the payment in a cryptocurrency wallet and converting it to Australian dollars to be held in the stakeholder’s trust account.

This gap raises the possibility of a contract for the sale of off-the-plan strata lots be deemed an instalment contract, where at the point of the vendor’s receipt of cryptocurrency, the purchaser is not entitled to receive a conveyance in exchange for that payment until the fiat currency is received in the stakeholder’s bank account.

This practical issue is further highlighted in circumstances where a further payment is required to satisfy the balance purchase price due to the shortfall in conversion loss or price volatility in the exchange from cryptocurrencies to Australian dollars.

No matter how swift the transfer from cryptocurrency to Australian dollar, the practical operation required to effect the settlement carries a risk of the contract being deemed an instalment contract by a court.

Consequence if an off-the-plan contract is deemed an instalment contract

If a contract is deemed to be an instalment contract, various provisions and restrictions under the Property Law Act would apply to the operation of the contract including:

  • restriction on vendor’s right to rescind the contract;[3]
  • restriction on vendor’s right to mortgage the land;[4]
  • right of purchaser to lodge caveat;[5] and
  • right of purchaser to require conveyance without making full payment.[6]

The operation of these provisions may have dire consequences on the finance for the project.

Cryptocurrency as “property” only?

There is also the issue of whether payment using cryptocurrencies is considered “payment” within the meaning of the Property Law Act. The Reserve Bank of Australia does not consider cryptocurrency as a form of ‘money’.[7] The Legal Profession Act 2007 (Qld) similarly does not provide for the holding of cryptocurrencies in a law firm’s trust account.

One view is to treat the cryptocurrencies as ‘property’, as opposed to a form of monetary payment.

In the decision of David Ian Ruscoe And Malcolm Russell Moore v Cryptopia Limited (in liquidation) [2020] NZHC 728, the High Court of New Zealand considered that cryptocurrency is ‘property’ within the meaning of the New Zealand Companies Act 1993 and potentially property in the common law sense.

The receipt of cryptocurrency by the stakeholder under the contract, if treated as ‘property’, could be held on trust as property pending conversion to Australian dollar and thereafter deposit into a bank account at the time of settlement.

However, as at the date of this article, there is no Australian decision on the issue of whether accepting cryptocurrency as payment for off-the-plan units will trigger the instalment contract provisions. The applicability of the Ruscoe case to the Australian property law is yet to be tested.

It is also unclear how this position could be reconciled with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 where cryptocurrencies are considered ‘digital currencies’ and subject to the provisions of that Act.

Arguably, it would not be the legislature’s intention to make all contracts which accept cryptocurrencies as payment deemed instalment contracts when the nature of the payment obligations is no different to any ordinary contract of sale.

Perhaps the upcoming proposed regulations on cryptocurrency and blockchain[8] may somehow address this issue. Until then, this remains an interesting unchartered territory.



[1] Section 71 of the Property Law Act 1974.

[2] Section 71 of the Property Law Act 1974.

[3] Section 72 of the Property Law Act 1974 (Qld).

[4] Section 73 of the Property Law Act 1974 (Qld).

[5] Section 74 of the Property Law Act 1974 (Qld).

[6] Section 75 of the Property Law Act 1974 (Qld).


[8] As announced by the Treasurer on or about 22 August 2022.