Significant Milestone: Regulatory Framework Expanded to Include Bitcoin-Backed Mortgages in Australia

Australia Approves First Bitcoin-Backed Mortgage After Legal Win

In a landmark decision, the Australian government has approved its first-ever Bitcoin-backed mortgage. The approval comes after a lengthy legal battle between crypto lending firm Block Earner and regulatory bodies. The company had been fighting to secure a court ruling that would allow it to offer crypto as collateral for home loans.

In a major victory, the Federal Court ruled in favor of Block Earner, clearing the way for its lending model to operate without breaching existing financial laws in Australia. This historic decision sets a crucial precedent for other firms seeking to expand their crypto-based financial services in the country.

The approved mortgage allows borrowers to use Bitcoin as collateral for up to 50% of a property’s value. The remaining amount is secured through a traditional mortgage. Fireblocks, a custody platform, has been entrusted with securing and handling the digital assets used in the transaction.

This groundbreaking initiative is especially significant considering Australia’s ongoing housing affordability crisis. The country has struggled to address the issue, with home prices skyrocketing 10 times average household incomes in some areas. This approval offers an innovative solution for cryptocurrency holders who may have previously been shut out of the traditional mortgage market.

The Australian government’s decision marks a crucial step forward in integrating cryptocurrencies into financial systems. As other countries face similar housing affordability challenges, Australia’s approach could become a benchmark for alternative home loan structures.

Source: coincentral.com