Bitcoin News Today: Australia Approves Bitcoin Backed Home Loans

Australia is poised to introduce its first home loan secured by Bitcoin, following a court decision that eliminated certain legal obstacles, thereby expanding the use of cryptocurrency in traditional financial services.

Block Earner, a Sydney-based fintech company, has announced its intention to offer Bitcoin-backed home loans in Australia. This development comes after the company secured a legal victory that clarified its ability to provide crypto-collateralized loans without the need for a financial services license.

The company had previously faced legal challenges from the Australian Securities and Investments Commission (ASIC), which contended that Block Earner’s fixed-yield crypto lending products resembled investment products and thus required licensing under financial services regulations.

Initially, the Federal Court ruled in favor of ASIC. However, this decision was overturned in April by the Full Federal Court. The appellate court determined that Block Earner’s products did not fall under the definition of “financial products” as per Australian law.

Consequently, Block Earner is no longer obligated to obtain an Australian Financial Services Licence (AFSL) to operate its crypto-backed lending services. This ruling clears the way for the company to offer mortgage products that allow crypto holders to use Bitcoin as collateral while retaining ownership of their digital assets.

Following this landmark victory, Block Earner plans to introduce mortgage products with interest rates starting at 9.5% per annum and a 40% loan-to-value ratio. Comparison rates will reach 11.9% per annum at an 80% loan-to-value ratio.