US Senator Lummis Pushes Crypto-Backed Mortgages in 21st Century Mortgage Act
US Senator Cynthia Lummis of Wyoming has introduced the 21st Century Mortgage Act, a landmark bill that could transform home financing in America. The legislation seeks to recognize cryptocurrency as a legitimate asset for mortgage applications, enabling digital asset holders to use their crypto as collateral for single-family home loans.
The proposal follows a June directive from the US Federal Housing Finance Agency (FHFA), which urged federal mortgage agencies to explore crypto assets in mortgage evaluations. Lummis’s bill would cement this guidance into law, formally integrating digital assets into the US housing finance system.
Modernizing Home Financing for the Digital Era
Speaking on Tuesday, Lummis described the bill as a forward-thinking approach to wealth-building. She emphasized that even Americans who don’t own crypto likely know someone who does, reflecting how digital assets have become part of modern financial life.
According to a recent US Census Bureau report, just 36% of Americans aged 35 and younger own homes—significantly lower than older demographics. Lummis argues that allowing crypto to count as mortgage collateral could create new pathways to homeownership, particularly for younger, tech-savvy investors.
Importantly, borrowers would not need to convert their crypto into cash to qualify for a mortgage. Instead, lenders could value the digital assets directly during the underwriting process. This approach would allow investors to retain their holdings and potential asset appreciation while securing financing.
Democratic Opposition Over Crypto Risk
Not all lawmakers support the idea. Senate Democrats have voiced strong concerns over crypto’s role in housing finance, citing volatility, liquidity challenges, and price instability.
In a July 24 letter to FHFA Director William Pulte, several Democrats warned that crypto’s unpredictable market behavior could undermine borrowers’ ability to meet long-term mortgage obligations. They urged the FHFA to conduct a comprehensive risk assessment before implementation, warning that such policies could inflate home prices, fuel speculation, or destabilize segments of the housing market if crypto values crash.
Broader Push for Crypto Regulation in Congress
The Lummis proposal is part of a broader push to integrate digital assets into the financial system. Lummis has also co-sponsored legislation to establish a clear regulatory framework for crypto, defining the roles of the SEC and CFTC and providing guidance for exchanges, token issuers, and investors.
Meanwhile, another Republican-backed bill—passed in the House—would prohibit the Federal Reserve from issuing a central bank digital currency (CBDC) over concerns about privacy and government overreach.
The House version of Lummis’s mortgage bill, known as the American Homeowner Crypto Modernization Act, was introduced on July 14 by Representative Nancy Mace. This proposal would require mortgage lenders to consider digital assets in underwriting if borrowers hold them in crypto brokerage accounts.
Global Momentum for Crypto-Backed Mortgages
The concept of crypto-backed home loans is also gaining traction globally. In July, Australian company Block Earner announced it will offer Bitcoin-backed mortgages, following a legal victory in which the Federal Court of Australia ruled its crypto loan products are not classified as financial products under current laws.
As Congress debates these proposals, the US could soon join other nations in legitimizing digital assets as collateral—potentially reshaping both the mortgage market and homeownership opportunities for crypto investors.
