In the picturesque village of Rezevici on the Montenegrin coast, a complex of six villas can be bought for three million euros’ worth of Bitcoin. In Prcanj, a charming little town on the Bay of Kotor, another villa is on sale for 2.2 million euros and can also be purchased in cryptocurrency.
On the websites of various agencies offering the possibility of purchasing real estate in Montenegro using cryptocurrencies, apartments, villas and land worth millions more are on offer.
The buyers of such expensive real estate are predominantly foreigners, and according to the Central Bank of Montenegro, the war in Ukraine has increased the numbers of Russians and Ukrainians who have left their countries and are seeking to use their crypto assets for transactions including real estate purchases
The cryptocurrency market and the purchase of real estate in crypto are not legally regulated in Montenegro, the Central Bank warns, but despite the potential risks, there have been millions of euros’ worth of real estate transactions that have been paid for in digital currencies.
“How does it all work? The key is trust, as all payments rely on trust even though blockchain technology has a serious scientific basis in mathematical algorithms,” Predrag Zecevic, economic analyst and editor-in-chief of the Biznis CG website, told BIRN.
The increased interest in cryptocurrencies in Montenegro coincided with the political rise of the country’s current Prime Minister Milojko Spajic, who was involved in the financial markets before he went into politics.
Before returning to Montenegro ahead of parliamentary elections in August 2020, which saw the end of veteran leader Milo Djukanovic’s 30-year rule, Spajic was a broker in Hong Kong, trading in cryptocurrencies, amongst other things.
After becoming minister of finance in December 2020, Spajic announced a wide range of new regulations that would make Montenegro a “crypto paradise”, including the establishment of an international tribunal for dealing with such cases.
This had to be put on hold after the government was ousted in the spring of 2022, but after new elections this autumn saw his Europe Now Movement winning a majority and Spajic becoming prime minister, his crypto-boosting plans were back on the table.
In 2022, the government granted citizenship to Vitalik Buterin, co-founder of the Ethereum blockchain and a guru in crypto circles, while Spajic claimed that that the cryptocurrency industry could grow to account for a third of national economic output by 2025.
This summer, Montenegro also this year hosted a two-month-long crypto conference at luxury resort Lustica Bay organised by Spajic, attended by Buterin and hundreds of executives, many of whom combined entrepreneurial brainstorming sessions with plunges in the Adriatic.
The Central Bank of Montenegro, CBCG said that according to private companies that estimate the number of cryptocurrency owners around the world, such as the crypto transaction service Triple-A, there are around 7,200 cryptocurrency owners in Montenegro, approximately 1.16 per cent of the population. This figure places Montenegro among the countries that have a relatively low percentage of cryptocurrency owners.
“However, we are aware that in Montenegro in recent years, there have been individuals and investors displaced from countries that are among the top ten cryptocurrency owners globally, such as Russia and Ukraine, and to a lesser extent Turkey. As a consequence, this dynamic has influenced a higher number of transactions in cryptocurrencies, including real estate purchases,” the communications directorate of the Central Bank told BIRN.
