The US Housing Agency may soon accept cryptocurrency as collateral in mortgage applications.
Market leaders predict that this update could reduce sell pressure on Bitcoin (BTC).
The cryptocurrency industry just recorded a historic breakthrough this week.
In a directive dated June 25, the Federal Housing Finance Agency (FHFA) instructed Fannie Mae and Freddie Mac to consider cryptocurrency as an asset class in evaluating risk for single-family home loans.
The decision signed by FHFA Director William J. Pulte allows loan applications to be closed without needing to convert cryptocurrency to US dollars beforehand.
Part of the guidance states,
“The FHFA of the United States is now directing each enterprise to draft proposals to consider cryptocurrency as a reserve asset in the risk assessment of single-family home mortgages, without the need to convert cryptocurrency to US dollars.”
Pulte emphasized that this move is a historic milestone for both industries, aligning with the president's vision to promote cryptocurrency and will be implemented as soon as possible.
Previously, cryptocurrency holdings were often overlooked in the lending due diligence process if not converted to cash.
However, this new directive allows cryptocurrency assets held on regulated centralized exchanges in the United States to count towards reserves.
Cryptocurrency integrating with traditional finance – how does Bitcoin benefit?
Naturally, this update has received quick responses from leaders in the cryptocurrency industry.
Michael Saylor, Founder of Strategy (formerly MicroStrategy), praised the integration of cryptocurrency.
Source: X
Notably, JPMorgan Chase is the first major bank in the United States to accept cryptocurrency ETFs as collateral for loans.
With significant regulatory relaxations following the Joe Biden era which was previously tight on cryptocurrency, many banks may quickly adopt digital assets.
This trend is also spreading in regions like South Korea and the United Arab Emirates (UAE). A complete global shift could confirm Saylor's predictions.
Saylor emphasized that Bitcoin [BTC] will benefit the most from this change.
“Future generations will remember this as the moment Bitcoin stepped into the American dream.”
Most industry experts agree that BTC will be used as collateral for loans, rather than users having to sell the coin to cover expenses.
In fact, according to Hunter Horsley – CEO of the digital asset management fund Bitwise, this trend could ease sell pressure on BTC over time.
He predicts that sell-off cash flow will gradually decline as BTC peaks at around $130,000.
Charles Edwards, founder of the macro hedge fund Capriole Investment, also concurred with this prediction. Prior to the announcement of crypto-backed loans, he stated,
“Millions of BTC no longer need to be sold. Big news.”
Overall, the move by the US housing agency could help reduce selling pressure on BTC in the future as this coin is used as important collateral for loans and liquidity, without requiring holders to liquidate assets.
Source: https://tintucbitcoin.com/bitcoin-vay-nha-fhfa-cho-phep-the-chap/
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