Australia Makes History: First-Ever Bitcoin-Backed Mortgage Greenlit Following Landmark Legal Victory

Banks just got a crypto wake-up call—Australia slams the gavel on tradition.

Subheader: Digital collateral crashes the property party

No more begging lenders to trust your BTC stack. A federal court just forced the system to recognize bitcoin as legitimate mortgage security—no apologies to the 'volatility scaredy-cats' in finance.

Subheader: The fine print that changes everything

Borrowers can now pledge bitcoin holdings without selling (read: no capital gains tax bullet to dodge). Loan-to-value ratios? Still murky—but hey, since when did banks need clarity to print money?

Closing jab: Watch legacy institutions suddenly 'discover' blockchain enthusiasm now that courts are cutting their veto power.

TLDR

• Australia has introduced its first Bitcoin-backed home loan following a court ruling in favor of Block Earner.
• The Federal Court ruled that Block Earner’s crypto lending products are not classified as financial products.
• Borrowers can now use Bitcoin to secure up to 50 percent of a property’s value through a crypto-collateralized loan.
• The rest of the home purchase is funded by a traditional mortgage to complete the financing structure.
• Fireblocks provides custody for the Bitcoin collateral to ensure secure handling of digital assets.

Australia has introduced its first Bitcoin-backed mortgage as crypto lending firm Block Earner secured a court victory. The Federal Court ruled that Block Earner’s lending products are not financial products under the Corporations Act. This decision allows the company to offer Bitcoin as collateral for home loans without a financial services license.

The mortgage enables borrowers to use bitcoin holdings to access up to 50% of a property’s value in cash. The remaining value is financed through a traditional mortgage to complete the home purchase. Custody platform Fireblocks secures the collateralized tokens used in the transaction.

This product arrives amid a housing affordability crisis in Australia, where home prices are far outpacing average household incomes. With average prices nearly 10 times income and Sydney at 14 times, access to financing remains a growing concern. The new mortgage structure provides crypto holders with an alternative route to enter the housing market.

Bitcoin Mortgage Shifts Lending Framework in Australia

Block Earner’s launch creates new lending criteria beyond traditional salary, savings, or superannuation-based assessments. Crypto holdings now offer a measurable financial asset that supports loan approval in this model. Borrowers must secure their Bitcoin on a verified custody platform to be eligible.

The loan product combines crypto-backed cash with standard mortgages to fund home purchases across Australia. It is currently capped at a 50% loan-to-value ratio on the Bitcoin portion. This hybrid model helps reduce default risk while offering more access to digital asset holders.

Block Earner spent over two years in court challenging the need for a financial services license. The recent ruling confirmed its lending model does not require the same regulatory framework as conventional banks. As a result, the company can now operate without breaching existing financial laws in Australia.

Australia’s financial regulators had previously argued that crypto-backed loans should fall under financial product classifications. However, the Federal Court disagreed and cleared the way for broader crypto integration in lending. This sets a precedent for other firms seeking to expand crypto-based financial services in Australia.

U.S. Follows Australia With Crypto Lending Proposals

The United States is exploring similar opportunities to use cryptocurrency for mortgage financing. On June 25, the Federal Housing Finance Agency directed major mortgage agencies to evaluate crypto as reserve assets. This shift could allow digital holdings to count toward mortgage approval.

Additionally, a bill introduced in the U.S. House of Representatives aims to update mortgage eligibility guidelines to include crypto. If passed, the bill WOULD let regulated exchange holdings qualify without requiring dollar conversion. The move could significantly expand mortgage access for American crypto investors.

Australia and the United States are both facing severe housing affordability challenges. These new initiatives mark a growing shift toward integrating cryptocurrencies in financial systems. Rising crypto values make digital assets an increasingly attractive FORM of collateral.

Australia’s approach now stands as a benchmark for alternative home loan structures. Its policy shift may influence other countries considering similar solutions to address their housing markets.