Fannie Mae and Freddie Mac’s government-sponsored company (GSE) soon began counting cryptocurrencies as assets in single-family mortgage risk assessments, advocating a key step towards embracing the mainstream digital assets under US President Donald Trump’s administration.
The directive was issued Wednesday by William J. Pulte, current director of the Federal Housing Finance Agency (FHFA), which regulates both GSEs.
FHFA has overseen Fannie May and Freddie Mac since 2008, when both agencies were placed under government sanctuaries in the aftermath of the financial crisis.
Pulte said the decision to include cryptocurrency as part of the mortgage risk assessment came “after much study,” and aligned with President Trump’s goal of making the US global crypto capital.
This decision means that cryptocurrencies will be considered reserve assets for loan borrowers without converting those assets into US dollars as before.
Fannie Mae and Freddie Mac have played a key role in the U.S. housing market since the subprime mortgage crisis, offering liquidity and stability by purchasing mortgages from lenders, allowing lenders to issue more loans.
Related: US mortgage regulators consider bitcoin amid the housing crisis
Crypto is accepted as a mainstream collateral in the US
The decision to recognize cryptocurrency as collateral for the mortgage process reflects an increase in mainstream acceptance of digital assets in the United States.
As reported by Cointelegraph, JPMorgan plans to enable selected wealth management clients to use crypto-based products such as Bitcoin (BTC) Exchange Trade Funds (ETFs) as collateral for funding.
In another development, Circle’s USDC (USDC) Stablecoin will become eligible collateral for futures trading starting next year through a joint initiative by Coinbase Derivatives and Virginia-based Clearinghouse Nodal Clear.
Although it’s a niche, there is already a crypto-assisted mortgage market. This allows crypto holders to use Bitcoin and ether (ETH) to fund real estate transactions.
Mauricio Di Bartolomeo, co-founder of Bitcoin Lending Platform Ledn, told CointeLegraph that many Bitcoin holders used digital assets as collateral to purchase real estate without selling their holdings.
https://www.youtube.com/watch?v=NPZQD7TSQMG
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