Bitcoin Proposed as Mortgage Collateral in New FHFA Directive
- Bitcoin considered as collateral by Fannie Mae and Freddie Mac.
- BTC value surged following the policy announcement.
- Major stablecoins included; altcoins largely unaffected.
FHFA Director William Pulte has proposed Fannie Mae and Freddie Mac assess Bitcoin as mortgage collateral, impacting the mortgage sector and crypto markets.
The initiative marks a shift in federal crypto policy, buoying Bitcoin prices while altering mortgage risk assessments.
Fannie Mae and Freddie Mac to Evaluate Bitcoin as Collateral
William Pulte, head of the Federal Housing Finance Agency, instructed Fannie Mae and Freddie Mac to consider Bitcoin as eligible mortgage collateral. This policy change aims to adapt mortgage practices to modern financial landscapes.
Key figures include Pulte, CJ Konstantinos of People’s Reserve, and Mitchell Askew of Blockware. They are evaluating the risk and liquidity advantages of Bitcoin and stablecoins in collateral assessments.
Bitcoin Prices Spike to $107,000 After Policy News
The policy announcement led to a significant rise in Bitcoin prices, reaching $107,000. Market reactions show positive sentiment toward Bitcoin, yet altcoins saw minimal benefits from this directive.
This directive prompts potential changes in mortgage risk management and financial planning. It aligns with broader objectives to position the US as a crypto-friendly leader globally.
Overturn of Previous Crypto Regulations Broadens Participation
Historically, federal regulations earmarked crypto as a financial liability, preventing its use as collateral. Recently repealed regulations have now opened avenues for inclusion in loan evaluations.
Expectations include a transition towards broader crypto adoption in financial sectors, potentially influencing mortgage practices similarly to previous financial product integrations.
“Fannie Mae and Freddie Mac are to assess the risk of accepting crypto assets, such as Bitcoin, as direct collateral for mortgage loans, without mandatory conversion to dollars” – William Pulte, Director, FHFA
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