Australia Introduces Bitcoin-Backed Mortgages Amid Housing Crisis
In a significant financial innovation, Block Earner has launched Australia’s first Bitcoin-backed mortgage, providing cryptocurrency holders with a new way to access the property market while retaining their digital assets. This development follows a landmark Federal Court ruling that classified Block Earner’s crypto lending products outside the scope of ‘financial products’ under the Corporations Act, removing the requirement for a financial services license.
How Bitcoin-Backed Mortgages Function
This pioneering financial product enables borrowers to secure up to 50% of a property’s value using Bitcoin as collateral. Digital assets are safeguarded by Fireblocks, a leading custody platform, with the remaining financing provided through conventional mortgage arrangements. This approach offers an alternative to traditional credit assessments based solely on income and cash reserves.
Global Developments in Crypto-Backed Home Financing
The trend extends beyond Australia. In the United States, the Federal Housing Finance Agency has instructed Fannie Mae and Freddie Mac to evaluate cryptocurrency holdings on regulated exchanges as potential reserve assets for mortgage underwriting. Proposed legislation in the U.S. House of Representatives could further integrate digital assets into home loan eligibility criteria.
Addressing Housing Affordability Challenges
Both Australia and the U.S. face acute housing affordability issues. Australian home prices average ten times typical household incomes, with Sydney’s ratio reaching fourteen times. Similarly, U.S. median home prices stand at seven times median incomes, exacerbating homelessness. Bitcoin’s 87% annual growth presents potential solutions to these systemic challenges.
