BREAKING: Senate Bill Could Make Crypto Your Next Mortgage Collateral

Washington shakes up real estate—your Bitcoin might soon unlock home loans.

From meme wallets to mortgage deeds

The proposed legislation would force traditional lenders to accept digital assets as loan security—turning volatile crypto into tangible leverage. No more selling your ETH top to buy a house.

Banks vs. blockchain redux

Expect resistance from legacy institutions (who still think 'stablecoin' refers to their 1950s business models). Meanwhile, DeFi platforms are already salivating at the prospect of crypto-backed lending 2.0.

The fine print gamble

Borrowers win if prices moon. But when the market tanks? Nothing says 'American Dream' like foreclosure notices triggered by a meme coin crash.

Wall Street will either adapt or watch crypto eat another lunch—probably while charging 2% 'blockchain conversion fees.'

Democrats question crypto risk in housing loans

That logic does not go over well with some lawmakers, however. Senate Democrats push back on proposed implementation of digital assets in the US housing market. They say cryptocurrency is still far too volatile, illiquid, and unpredictable for it to be considered stable collateral for long-term loans, such as mortgage payments.

In a letter dated July 24, a group of Senate Democrats expressed concern to FHFA Director William Pulte about the potential financial risks of the policy. They warned that, even as the crypto market matures, ongoing volatility and liquidity issues could make it difficult for borrowers to exit their crypto positions and convert assets into cash at prices sufficient to support their mortgage obligations.

The members requested a full risk assessment, recommending that the FHFA consider the broader implications of digital assets in the traditional housing finance system. They also cautioned that crypto-based mortgage lending could inadvertently drive up the price of homes, exacerbate speculation in the market, or destabilize parts of the economy if the values of cryptocurrencies unexpectedly plummet.

Congress pushes forward crypto mortgage bills

Other crypto-centric bills are currently making their way through Congress, as part of a larger trend toward regulating and mainstreaming digital assets in US financial law.

Ms. Lummis also sponsored a separate Republican bill to establish a full market structure for digital assets. That bill carves out SEC and CFTC roles and offers regulatory clarity for crypto exchanges, token issuers, and investors.

Another bill gaining traction — especially among conservatives — would prohibit the Federal Reserve from creating a central bank digital currency (CBDC) based on privacy and government overreach concerns. The House passed this bill and may come up in the Senate in the fall, after the August recess.

The House version of Lummis’ mortgage bill, which is also called the American Homeowner Crypto Modernization Act, was introduced on July 14 by Representative Nancy Mace. Mace’s legislation requires mortgage lenders to consider digital assets in their underwriting if borrowers have assets in crypto brokerage accounts.

Global events are stoking momentum as well. In July, Australian company Block Earner said it would offer Bitcoin-backed mortgages. The rollout was facilitated by a legal victory after the Federal Court of Australia decided that the firm’s crypto loan products should not be regarded as financial products under the current legislation. 

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