Digital currencies potentially securing future home loans
The 21st Century Mortgage Act, a groundbreaking legislation introduced by Senator Cynthia Lummis, is set to address the hurdles faced by younger individuals in securing affordable housing. This act seeks to recognise the potential value of digital asset holdings in mortgage applications.
The Act, if passed, would not require the conversion of cryptocurrency to fiat currency for housing loan applications. Instead, it aims to allow cryptocurrency holdings to be assessed as collateral for these applications. This could provide a significant opportunity for younger Americans to secure housing loans, given that homeownership for US residents under the age of 35 was approximately 36% as of the first quarter of 2025.
However, the Act has drawn scrutiny from some Senate Democrats, who have raised concerns about the potential risks and benefits of integrating cryptocurrency into mortgage assessments. The letter from Senate Democrats highlighted the inherent risks associated with cryptocurrency's volatility and liquidity.
The FHFA's June order, which the Act seeks to codify, has also been a subject of debate. Senate Democrats have urged FHFA Director William Pulte to conduct a full assessment of the potential risks and benefits of including crypto in mortgage applications.
Meanwhile, a bill aimed at preventing the Federal Reserve from launching a central bank digital currency, which passed in the House of Representatives in July, is also under consideration.
In addition to the 21st Century Mortgage Act, Senator Lummis is also involved in a bill focused on establishing a digital asset market structure within the Senate. This bill, if passed, could further shape the role of digital assets in the financial sector.
As the Senate deliberates on these crypto-related bills following its August recess, it remains to be seen how the 21st Century Mortgage Act will impact the housing market and the financial future of younger Americans.
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