Cryptocurrency exchange Coinbase Global (NASDAQ: $COIN) is offering cryptocurrency-backed mortgages to U.S. homebuyers.
Coinbase says it is partnering with mortgage firm Better Home & Finance (NASDAQ: $BETR) to enable people to use Bitcoin (CRYPTO: $BTC) as a down payment when buying a house.
The new crypto mortgages have the support of the U.S. federal government and offer the same protections and standards as traditional mortgages.
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However, Coinbase warns that the interest rates charged on the new crypto-backed mortgages will be higher than a standard 30-year mortgage by about 1.5 percentage points.
Still, homebuyers across America can now use Bitcoin and the USDC (CRYPTO: $USDC) stablecoin as collateral to fund their down payment and secure a home mortgage.
The move to accept cryptocurrencies as collateral comes as the U.S. government tries to boost home ownership across America and revive the struggling housing market.
High interest rates and stagnant house prices have kept many would-be homebuyers on the sidelines since the Covid-19 pandemic ended.
Coinbase says that cryptocurrency holders on its exchange can transfer their digital assets to a custody wallet with Better Home as a downpayment while retaining ownership rights over their Bitcoin and USDC stablecoins.
Critics warn that securing mortgages with volatile cryptocurrencies could result in a housing crisis, especially if Bitcoin’s price continues to decline.
U.S. President Donald Trump has promised to let people use their Bitcoin as mortgage collateral as part of his strategy to make America the “crypto capital of the planet.”
Bitcoin is currently trading at $69,600 U.S., having declined about 40% from an all-time high of just over $126,000 U.S. reached last fall.