Non-Small News Flash: The U.S. Plans to Allow Cryptocurrency as Collateral for "GSEs", Market Fears a Repetition of the Subprime Crisis
According to Caixin, the Federal Housing Finance Agency (FHFA) has officially ordered housing loan giants Fannie Mae and Freddie Mac to consider including cryptocurrencies in the category of collateral assets for residential mortgage risk assessments.
This move has sparked heated discussions in the market, with several cryptocurrency industry experts pointing out that this could signal a significant change in the asset review standards for U.S. housing loan applications, allowing borrowers to potentially use cryptocurrencies like Bitcoin and Ethereum as collateral.
Is this a boon or a hidden danger for the crypto industry?
An industry insider who wished to remain anonymous told Caixin reporters that this policy is undoubtedly good news for the cryptocurrency industry. If implemented, this policy could further promote the legalization and mainstream acceptance of cryptocurrencies, bringing new development opportunities to the industry.
However, he also warned that the cryptocurrency market is known for its high volatility, and if included in the housing loan system, its price fluctuations could directly impact the stability of mortgages, laying the groundwork for the next subprime crisis.
Market Concerns Intensify
The FHFA's order has triggered widespread concerns in the market about potential risks. The dramatic ups and downs in cryptocurrency prices have long been known; for instance, Bitcoin has surged or plummeted by dozens of percentage points within days.
If used as collateral, once the market crashes, the value of borrowers' assets could quickly shrink, leading to a surge in loan default risks. Industry insiders generally believe that while this move may stimulate innovation, it also introduces new uncertainties into the housing loan market.
Regulatory Caution Needed
In light of this policy direction, market participants are calling on regulatory agencies to carefully assess potential risks while promoting innovation, to ensure long-term stability and safety in the housing loan market. The FHFA's next steps will undoubtedly become a focal point of market attention for the foreseeable future.
Disclaimer: The content of this article is for reference only and does not constitute investment advice. The cryptocurrency market is highly volatile; investments should be made with caution.
