Bitcoin News Today: Australia Launches First Bitcoin-Backed Mortgage After Legal Victory US Explores Crypto Holdings for Mortgage Underwriting

Block Earner, a company based in Australia, has introduced the country’s first Bitcoin-backed mortgage, providing a new avenue for cryptocurrency holders to enter the property market without liquidating their digital assets. This development comes after a lengthy legal battle with regulators that spanned over two years. The Federal Court's ruling in April determined that Block Earner’s crypto lending products did not fall under the definition of “financial products” as outlined in the Corporations Act, thereby exempting the company from the need for a financial services license.

The new mortgage product allows borrowers to use their Bitcoin holdings as collateral, securing a cash loan for up to 50% of the property’s value. The remaining financing is complemented by a standard mortgage. The collateral tokens are safeguarded by the custody platform Fireblocks, ensuring the security of the digital assets. This innovative approach to creditworthiness shifts the focus away from traditional loan approval criteria, which typically emphasize salary, cash reserves, and superannuation (Australia’s mandatory retirement program).

In the United States, similar developments are underway. The Federal Housing Finance Agency (FHFA) Director William Pulte has instructed Fannie Mae and Freddie Mac to explore the inclusion of crypto holdings on regulated centralized exchanges as reserve assets for mortgage underwriting. This directive aims to integrate cryptocurrency into the mortgage risk assessment process, potentially expanding access to home loans for digital asset holders. Additionally, a new bill introduced in the US House of Representatives seeks to mandate that mortgage agencies recognize cryptocurrency holdings on regulated exchanges as part of a borrower’s financial profile, further broadening the scope of crypto-backed financing.

Both Australia and the United States are grappling with severe housing crises, making homeownership increasingly unattainable for many citizens. In Australia, home prices average nearly 10 times the typical household income, with Sydney being one of the most expensive cities globally. In the US, median home prices have surged to over $420,000, roughly seven times the median household income, leading to record levels of homelessness. Despite these challenges, the value of Bitcoin has risen nearly 87% over the past twelve months, making it a more attractive option for those seeking to leverage their digital assets for home purchases.