A new bill introduced in the U.S. Senate could transform how digital assets like Bitcoin and Ethereum are viewed in the housing finance system. The legislation, titled the 21st Century Mortgage Act, aims to make cryptocurrency holdings a valid consideration in mortgage approval processes.
Digital Assets May Soon Count as Mortgage Collateral
Senator Cynthia Lummis has proposed that U.S. mortgage giants such as Fannie Mae and Freddie Mac be required to recognize crypto assets when assessing risk for single-family mortgage loans. This follows a June directive from the Federal Housing Finance Agency (FHFA), which encouraged lenders to explore crypto-based evaluations.
This bill represents a potential breakthrough for young Americans who hold digital assets and face barriers to homeownership.
According to recent U.S. Census Bureau data, homeownership among individuals under 35 stands at just 36%, highlighting an affordability crisis. By counting crypto as a financial asset, borrowers would not be forced to convert holdings into fiat, providing more financial flexibility during the application process.
Lawmakers Express Concerns Over Market Volatility
Despite the push from Republican lawmakers, several Senate Democrats have voiced concerns. They argue that the historical volatility of crypto markets and liquidity risks could pose significant challenges to the stability of mortgage loans. A letter addressed to the FHFA emphasized the need to evaluate whether crypto can act as a reliable buffer against default risk.
The bill seeks to modernize credit evaluation while still balancing financial risk.
Multiple Crypto-Related Bills Enter Senate Pipeline
The crypto mortgage bill is part of a broader legislative push ahead of the Senate’s August recess. Senator Lummis is also championing a digital asset market structure bill, while a separate proposal aims to restrict the Federal Reserve from launching a central bank digital currency (CBDC).
A similar mortgage-focused bill—The American Homeowner Crypto Modernization Act—was already introduced in the House by Representative Nancy Mace. That legislation mandates mortgage lenders to include crypto assets held in brokerage accounts during credit evaluations.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.