US Senate bill proposes $200B boost for crypto in mortgage lending

A new bill introduced by Wyoming Senator Cynthia Lummis aims to integrate digital assets into the US mortgage approval process.

The proposed 21st Century Mortgage Act would require mortgage purchasers such as Fannie Mae and Freddie Mac to consider certain cryptocurrencies as part of risk assessments for single-family loans.

This follows a June order from the Federal Housing Finance Agency (FHFA) instructing these entities to recognise cryptocurrency holdings in mortgage applications.

"This legislation embraces an innovative path to wealth-building keeping in mind the growing number of young Americans who possess digital assets," said Lummis.

The bill addresses housing affordability challenges faced by younger Americans, with US Census Bureau data showing only 36% homeownership among those under 35 as of early 2025.

Unlike traditional mortgage processes, the legislation would not force borrowers to convert crypto into fiat currency but assess holdings directly as collateral.

However, some Senate Democrats have expressed concerns about the market’s historical volatility and liquidity risks.

"To the extent that historical volatility and liquidity persists even as the market matures, a borrower using crypto faces an increased risk that they may not be able to exit a crypto position and convert to cash at a price that would allow them to buffer against risk of mortgage default," stated a letter from several Democrats dated 24 July.

The bill is among several crypto-focused legislative efforts expected when the Senate returns from its August recess.

Other proposals include establishing a digital asset market structure and restricting the Federal Reserve from issuing a central bank digital currency.

In parallel, the House has introduced a similar proposal, the American Homeowner Crypto Modernization Act, which also directs mortgage lenders to consider digital assets in credit evaluations.

Internationally, Australia’s Block Earner has announced plans to offer Bitcoin-backed mortgages, signalling growing global interest in integrating crypto into housing finance.