Coinbase has partnered with Better Home & Finance Holding Co. to introduce crypto-backed mortgages, allowing borrowers to use digital assets as collateral for home purchases. The loans are structured as conforming mortgages backed by Fannie Mae, meaning they follow the same standards and protections as traditional home loans.

The product enables buyers to pledge assets such as Bitcoin or USDC instead of liquidating them for a down payment. This approach allows borrowers to retain ownership of their crypto holdings while avoiding potential tax liabilities associated with selling assets.

Addressing a Key Barrier to Homeownership

One of the biggest challenges for prospective homeowners is assembling a sufficient down payment. According to Better, a large portion of potential buyers are unable to purchase homes despite having assets in investments or savings vehicles.

By using crypto as collateral, borrowers can unlock liquidity without navigating complex tax events or selling long-term holdings. For example, a buyer purchasing a $400,000 home might struggle to produce a $40,000 down payment in cash, even if they hold sufficient value in crypto assets.

This structure aims to simplify the process by allowing Coinbase users to transfer their assets into a custody wallet managed in coordination with Better, while still maintaining ownership rights.

Loan Structure and Risk Management

The crypto-backed mortgages come with slightly higher interest rates than traditional 30-year loans, typically ranging from 0.5% to 1.5% above standard rates depending on the borrower’s profile. However, the structure includes features designed to reduce volatility-related risks.

Notably, the loans do not involve margin calls or collateral top-ups if the value of the pledged crypto declines. Market fluctuations alone will not trigger liquidation, offering borrowers greater stability compared to other crypto-backed lending products.

Collateral is only at risk if the borrower becomes delinquent on mortgage payments for an extended period, typically 60 days, aligning the structure more closely with conventional mortgage practices.

Expanding Access Beyond Wealthy Investors

Crypto-backed lending has historically been associated with high-net-worth individuals and wealth management strategies. However, this initiative is aimed at mainstream homebuyers, positioning it as a more accessible financial tool.

Executives at Coinbase described the product as a way to democratize access to homeownership, enabling individuals to leverage their digital assets similarly to how affluent clients use traditional securities as collateral.

Bridging Crypto and Traditional Finance

The partnership reflects a broader trend of integrating digital assets into traditional financial systems. By combining crypto collateral with regulated mortgage frameworks, Coinbase and Better are effectively bridging two previously separate financial ecosystems.

As housing affordability remains a challenge and digital asset ownership grows, crypto-backed mortgages could become an increasingly viable option for buyers. The initiative signals a shift toward using blockchain-based wealth not just for investment, but for real-world financial applications like homeownership.

Coinbase is pushing back against a proposed compromise in the US Senate’s crypto market structure bill, particularly over provisions that would restrict stablecoin yield programs. According to reports, company representatives raised concerns during a recent meeting with lawmakers, signaling continued resistance to language that could limit how exchanges offer rewards on stablecoin holdings.

The latest draft reportedly includes measures preventing third parties, such as exchanges, from paying yield on stablecoin balances. This proposal is aimed at addressing concerns from the traditional banking sector, which argues that such incentives could encourage deposit flight from regulated financial institutions.

Ongoing Battle Between Crypto Firms and Banks

The debate over stablecoin yields has become a central sticking point in efforts to pass comprehensive crypto legislation. Banking groups argue that yield-bearing stablecoins create a regulatory loophole, particularly following provisions in the GENIUS Act that prohibit issuers from directly offering interest to users.

Crypto firms, including Coinbase, have countered that these concerns are overstated and accuse banks of attempting to stifle competition. Stablecoin rewards remain a key revenue driver for exchanges, often funded by interest earned on reserve assets.

The disagreement has already disrupted legislative progress. Earlier this year, Coinbase withdrew support for the bill, contributing to delays in advancing the proposal through the Senate Banking Committee.

Lawmakers Seek a Delicate Compromise

Efforts to revive the bill are being led by Thom Tillis and Angela Alsobrooks, who are working to craft a compromise acceptable to both the crypto industry and traditional financial institutions. However, the path forward remains uncertain, with negotiations ongoing and no clear resolution in sight.

Meanwhile, the House of Representatives has already passed its version of the legislation, the CLARITY Act, increasing pressure on the Senate to reach an agreement. Republican lawmakers are aiming to finalize the bill before the upcoming midterm elections, which could shift the balance of power in Congress.

Industry and Political Stakes Remain High

The outcome of the stablecoin yield debate could have significant implications for the broader crypto market. Limiting rewards on stablecoin balances may reduce their attractiveness to users, potentially affecting adoption and liquidity across platforms.

At the same time, policymakers are trying to balance innovation with financial stability. Cynthia Lummis has emphasized the urgency of reaching a bipartisan agreement, noting that delays could stall regulatory clarity for years.

Despite the tensions, some officials remain optimistic that a compromise can be reached. However, the continued divide between crypto firms and banks underscores the complexity of integrating digital assets into existing financial frameworks, leaving the future of US crypto regulation uncertain.

A long-anticipated US proposal that could expand access to alternative investments in retirement plans has cleared a key regulatory hurdle. The rule, backed during the administration of Donald Trump, has completed review by the Office of Information and Regulatory Affairs, paving the way for publication by the Department of Labor in the coming weeks.

If finalized, the proposal would significantly reshape the regulatory framework governing 401(k) plans, opening the door for assets like cryptocurrency and private equity to be included in retirement portfolios.

Expanding Investment Options for Retirement Plans

The rule is expected to impact the roughly $12 trillion 401(k) market by allowing broader exposure to alternative investments. Historically, such assets have been limited in retirement plans due to concerns about volatility, complexity, and fiduciary risk.

Under the proposal, the Department of Labor’s Employee Benefits Security Administration would provide clearer guidance to employers on how to incorporate these assets while remaining compliant with the Employee Retirement Income Security Act of 1974.

This shift reflects growing interest among investors in diversifying retirement portfolios beyond traditional stocks and bonds, particularly as digital assets gain mainstream attention.

Addressing Employer Liability Concerns

A key objective of the proposal is to reduce legal uncertainty for employers offering alternative investments. Companies sponsoring 401(k) plans often face lawsuits from participants who claim underperformance or excessive fees, making them cautious about introducing higher-risk assets.

By offering a clearer regulatory “safe harbor,” the rule aims to reassure employers that including crypto or private equity options will not automatically expose them to increased fiduciary liability.

Potential Impact on Crypto Adoption

The inclusion of cryptocurrencies in retirement accounts could mark a major milestone for the industry. Access to 401(k) plans would significantly expand the investor base, potentially driving new inflows into digital assets.

At the same time, critics have raised concerns about volatility and suitability for long-term retirement savings. Regulators are expected to balance innovation with investor protection as the proposal moves toward potential finalization.

If implemented, the rule could accelerate the integration of alternative assets into mainstream finance, signaling a shift in how retirement portfolios are constructed in the US.