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Australia has made a significant breakthrough in the real estate sector by approving its first Bitcoin-backed mortgage. This landmark decision comes after Block Earner emerged victorious in court, allowing the company to offer crypto as collateral for home loans.
As reported, the Federal Court ruled in favor of Block Earner, confirming that their lending model does not require a financial services license. Consequently, the company can now operate without breaching existing financial laws in Australia.
The approval marks a significant shift in the country’s stance on using cryptocurrency for mortgage financing. The innovative loan product enables borrowers to use Bitcoin holdings as collateral to secure up to 50% of their home purchase. The remaining value will be funded through a traditional mortgage.
In this new structure, custody platform Fireblocks ensures the secure handling of digital assets. This move comes at a time when Australia is grappling with a housing affordability crisis, where home prices are rising exponentially faster than average household incomes. According to recent data, Sydney real estate prices have surpassed 14 times the national average salary, while overall averages stand at nearly 10 times.
The Bitcoin-backed mortgage initiative aims to provide an alternative route for cryptocurrency holders to enter the housing market. The shift in lending criteria beyond traditional income-based assessments will help bridge the gap between property prices and household incomes.
Source: coincentral.com
