Crypto Counts for Credit?

The U.S. is taking serious steps to bring crypto into the mainstream mortgage system, starting with how borrowers prove they have financial reserves. It is still early, but if the pilot succeeds, this could become a permanent part of the home loan process by 2026.

In Europe, the building blocks are in place. Regulation, market interest, and borrower demand are growing. However, the shift will likely be slower and vary by country. The most innovative lenders may begin experimenting with this by 2027 or later, starting in more crypto-friendly markets.

The details:  U.S. Federal Housing Finance Agency (FHFA) has proposed a new rule that would allow government-backed mortgage providers Fannie Mae and Freddie Mac to consider cryptocurrencies like Bitcoin as part of a borrower’s financial reserves when applying for a home loan. This would mark a major shift in how digital assets are treated in U.S. mortgage lending.

Here are the key points:

• Crypto as reserves, not down payment:
  Borrowers could use crypto as proof they have enough savings after the purchase, known as reserves. However, it would not count toward the down payment or affect credit score evaluations.
• Verification requirements:
  Borrowers would need to show 90 to 120 days of account statements or transaction records from a U.S.-regulated crypto exchange. These documents must prove that the assets are seasoned and belong to the borrower.
• Only regulated platforms qualify:
  Only digital assets held on regulated U.S. exchanges would be considered. Crypto stored in self-custodied wallets (not held on exchanges) may not qualify under these rules.
• Haircut for volatility:
  Due to crypto’s price swings, the value of the assets would be discounted by 20 to 30 per cent when calculating their contribution to reserves. This provides a buffer for market drops.
• Payments remain in U.S. dollars:
  Borrowers would still make monthly mortgage payments in U.S. dollars, not in cryptocurrency.
• No taxable event:
  Listing crypto as an asset for loan qualification purposes would not trigger a capital gains tax, since the borrower is not converting or selling the crypto.
• Part of broader regulatory momentum:
  The proposal fits within a wider shift in the U.S. toward regulated digital finance. It also relates to legislative efforts like the GENIUS Act, which would set clearer standards for stablecoins and digital asset use in financial systems.
• Next steps and timeline:
  A public comment period is open until mid-July 2025. This will be followed by internal reviews and potential guide updates. A pilot rollout could happen as early as early 2026, depending on board approval at Fannie Mae and Freddie Mac.

Will This Happen in Europe Too?

Not immediately, but it is becoming increasingly possible over the next few years. Here is why:

Why it could happen:

• EU regulation is in place:
  The EU’s MiCA regulation (Markets in Crypto-Assets), which took effect in June 2024, gives European countries a shared legal framework for handling crypto, exchanges, and digital assets.
• Innovation by some European banks:
  Banks in France, Germany, and Spain are already working on tokenised securities and digital asset custody. This shows that the ecosystem is gradually evolving.
• Younger borrowers are pushing for change:
  Many younger Europeans now hold crypto as part of their savings. This may push lenders to adapt in the future.

What’s holding it back:

• Conservative lending practices:
  Most European banks still see crypto as too risky or unstable to include in traditional financial assessments.
• Fragmented mortgage systems:
  Unlike the U.S., Europe does not have centralised agencies like Fannie Mae or Freddie Mac. This makes a coordinated rollout more complex.
• Unclear tax rules:
  Many EU countries treat crypto as a speculative asset and tax it accordingly. Using it in mortgage processes could raise legal or tax issues unless reforms are made.

Country outlook:

• Most likely early adopters:
  Germany, the Netherlands, and Nordic countries may lead due to their fintech ecosystems and regulatory clarity.
• More cautious markets:
  France, Spain, and Italy may follow later, depending on market pressure and government support.