Bitcoin News Today: Senator Lummis Introduces 21st Century Mortgage Act Recognizing Cryptocurrency as Loan Asset

Senator Cynthia Lummis (R-WY) has introduced the 21st Century Mortgage Act, a legislative proposal aimed at redefining mortgage eligibility by recognizing cryptocurrency holdings as qualifying assets for loan assessments. Announced on July 28–29, 2025, the bill would enable lenders to evaluate applicants’ Bitcoin and other stable digital assets—specifically those held for at least two years—as part of their financial profiles. Lummis’ office emphasized the initiative seeks to modernize mortgage practices to align with evolving asset diversification trends, rather than encouraging speculative behavior [1][3]. The proposal aligns with broader efforts to integrate crypto into mainstream finance, though its implications for market dynamics and regulatory frameworks remain debated [2].

The bill’s framework would require lenders to assess stable cryptocurrency balances when determining mortgage eligibility, potentially expanding homeownership access for individuals with substantial crypto wealth. Younger investors, who may have accumulated digital assets through early adoption or trading, could benefit from this shift. Proponents argue the move could stimulate demand for stablecoin-backed loans and increase liquidity in the digital asset market [3]. However, critics warn of risks tied to crypto volatility and potential regulatory arbitrage. The Federal Housing Finance Agency (FHFA) has previously explored integrating crypto into mortgage collateral but has not established formal guidelines, a gap Lummis’ bill may address by creating a legal framework for lenders [2][5].

The timing of the proposal coincides with broader legislative and executive actions to normalize crypto usage in the U.S. economy. While the bill does not directly reference Trump’s proposed executive orders to include crypto in retirement accounts and mortgages, it reflects a shared goal of expanding the asset’s utility. Trump’s advocacy for crypto-friendly policies, including potential FHFA reforms, has already sparked bipartisan discussions on balancing innovation with consumer protection [6]. Lummis’ focus on residential lending, however, distinguishes it from Trump’s retirement-focused initiatives.

Key challenges for the bill’s implementation include developing clear valuation methodologies for crypto assets, which differ from traditional collateral like real estate or stocks. Regulatory alignment with anti-money laundering (AML) and know-your-customer (KYC) requirements will also be critical to prevent misuse [3]. The market’s response to increased demand for crypto-backed mortgages could further influence adoption rates, potentially driving institutional interest in stablecoins and custodial services.

The proposal highlights a shift toward treating digital assets as functional equivalents of traditional wealth, moving beyond Bitcoin’s price fluctuations to their role in financial infrastructure. If enacted, the bill could signal a pivotal moment for crypto’s integration into everyday economic activities, though its success will depend on execution, market readiness, and regulatory clarity [4].

Sources:

[1] “Bitcoin News Today: Senator Lummis Proposes 21st Century Mortgage Act to Recognize Bitcoin and Digital Assets in Loan Eligibility,” AInvest (https://www.ainvest.com/news/bitcoin-news-today-senator-lummis-proposes-21st-century-mortgage-act-recognize-bitcoin-digital-assets-loan-eligibility-2507/)

[2] “Senator Cynthia Lummis Introduces Mortgage Act To Recognize Bitcoin in Loan Eligibility,” CoinGape (https://coingape.com/senator-cynthia-lummis-introduces-mortgage-act-to-recognize-bitcoin-in-loan-eligibility/)

[3] “U.S. Senator’s Mortgage Bill Recognizes Crypto in Loan Eligibility,” CryptoRank (https://cryptorank.io/news/feed/f983c-us-senators-mortgage-bill-recognizes-crypto-in-loan-eligibility)

[4] “Lummis’ Bold Bill Unlocks New Homeownership Pathways,” Bitcoin (https://bitcoinworld.co.in/crypto-mortgages-lummis-bill/)

[5] “U.S. Senator Proposes Mortgage Reform to Include Crypto Assets in Loan Evaluations,” Binance (https://www.binance.com/en/square/post/07-28-2025-u-s-house-advances-anti-cbdc-bill-amid-crypto-legislation-push-27569775044377)

[6] “Trump Eyes Moving U.S. Economy Further Into Crypto Via Mortgages and 401(k)s,” CoinDesk (https://www.coindesk.com/news-analysis/2025/07/28/trump-eyes-moving-u-s-economy-further-into-crypto-via-mortgages-401-k-s)