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Cryptocurrency: Preparations have started in the US to give home loans by considering cryptocurrency as property. Digital assets like Bitcoin can now be included in the mortgage. However, only crypto kept in a US-regulated exchange will be valid, with a condition attached.

Cryptocurrency: The process of buying a house in America can now be easy for cryptocurrency holders. The US government has directed the country's leading mortgage agencies Fannie Mae and Freddie Mac to prepare their businesses in this direction, so that cryptocurrency can be accepted as an asset in mortgage applications.

This information was shared on social media by William "Bill" Palte, head of the Federal Housing Finance Agency (FHFA). He wrote, "In line with President Trump's vision of making America the capital of crypto, I have directed Fannie Mae and Freddie Mac to prepare to recognize crypto as property." What was the rule earlier?

So far, cryptocurrency was not recognized as a financial asset in mortgage applications. Applicants had to first sell their crypto assets and deposit the money in a traditional bank account. This guideline was issued under the Biden administration, in which crypto was considered highly volatile.

What will change with the new rules?

Now crypto can be combined with other assets like stocks and bonds. That is, if your cryptocurrency is secured in a US-based and regulated exchange, then you can include it directly in your home loan application. It is worth noting that if your crypto asset is in a private wallet or foreign exchange, it will not be recognized.

Relief for self-employed

This move can benefit freelancers, startup owners and crypto investors the most whose income is not regular. In traditional loan processes, it is necessary to show a stable cash reserve, but now digital assets can also meet this requirement.

The FHFA has directed both Fannie and Freddie to formulate strategies to mitigate the risks associated with crypto. This means that lenders can apply a discount on the declared value of crypto and ask for additional documentation such as exchange records, proof of stability.

It will take time for the rules to come into effect

This process is still in its beginning. Fannie Mae and Freddie Mac will first have to prepare their proposals, then get them approved by the board and finally send them to the FHFA for final review. Only after this will this system be implemented. And this step has been taken at a time when a plan is underway in the US to return Fannie Mae and Freddie Mac to the private sector. Both these companies were under government control for the last 17 years. Some experts believe that privatization of these companies may make borrowing expensive, but the inclusion of digital finance can also bring new energy to the market.

India's stance is still not clear

While the US is moving towards giving formal recognition to crypto, in India cryptocurrency is still neither accepted as a payment medium nor controlled by any regulatory body. The Reserve Bank of India (RBI) has issued warnings regarding crypto several times. Cryptocurrencies like bitcoin are not considered legal tender in India and the government has not yet brought a clear law regarding its status. However, tax is applicable on cryptocurrency in India.

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