Cryptocurrency exchange Coinbase Global (COIN) is partnering with mortgage firm Better Home & Finance Holding (BETR) to bring crypto-backed mortgages to U.S. homebuyers.
The move, which has support from the Trump administration, enables owners of Bitcoin (BTC) and other crypto to use their digital assets as down payment collateral when buying a home.
The mortgage is structured as a conforming loan backed by the U.S. federal government, meaning it carries the same protections and standards as traditional mortgages.
Going forward, homebuyers in the U.S. can pledge Bitcoin or the USDC stablecoin as collateral to fund their down payment.
In the case of USDC, homebuyers can keep earning rewards on the stablecoin that is administered by Circle Internet Group (CRCL).
The move to accept cryptocurrencies as collateral comes as the Trump administration tries to revive the slumping housing market and increase home ownership across America.
Surveys show that about 41% of American families fail to buy a home because they don't have enough funds for the down payment.
Homebuyers have been squeezed in recent years by high interest rates while house prices have remained largely flat.
Cryptocurrency holders on the Coinbase exchange can now transfer their digital assets to a custody wallet with Better Home as a downpayment while retaining ownership rights.
However, Coinbase Global has said that the interest rates charged on crypto-backed mortgages will be higher than a standard 30-year mortgage by as much as 1.5 percentage points.
Critics say securing mortgages with cryptocurrencies is a recipe for disaster and could lead to another crisis in the housing sector, especially if Bitcoin’s price collapses.
BTC is currently trading at $69,000 U.S., having fallen from an all-time high of just over $126,000 U.S. last October.
