The US government is making a major change to how it views cryptocurrency. The Federal Housing Finance Agency (FHFA) just told Fannie Mae and Freddie Mac – two huge players in the US mortgage market – to start accepting crypto as part of home loan applications.
Crypto as Collateral: The New Normal?
This means borrowers might soon be able to use their cryptocurrency holdings to qualify for a mortgage, without having to sell their crypto first. The FHFA director, William J. Pulte, says this move is in line with the US government’s goal of being a global leader in crypto.
This is a big deal because crypto has usually been excluded from mortgages due to its price swings and the fact that it’s not always easy to track. But things are changing.
A Cautious Approach
The FHFA isn’t just letting any crypto be used. Only crypto held on US-regulated exchanges will be considered. This is to make sure everything is above board and easily tracked. Plus, Fannie Mae and Freddie Mac will have to figure out ways to deal with crypto’s volatility so it doesn’t put the mortgage system at risk.
They’ll need to submit their plans to the FHFA for approval.
A Monumental Moment for Crypto
One market expert, Echo X, called this a “monumental shift.” They believe this opens the door for much wider use of crypto in the housing market, potentially leading to a whole new “tokenized” real estate market.
The news sent crypto prices up, with Bitcoin jumping and the overall crypto market cap rising significantly.