Till now people used crypto only for trading or investment, but now it is going to be directly included in your financial life. The US Federal Housing Finance Agency (FHFA) has indicated that crypto can be accepted as a mortgage asset from 2025. That is, if you have tokens like Bitcoin, Ethereum or Solana, then you will be able to take a home loan by mortgaging them.
Along with investing in cryptocurrency, the trend of crypto lending is also increasing. It can also be called borrowing or loan in exchange for digital assets. Here crypto loan has been explained. Especially its advantages and disadvantages have been explained. Along with this, it has also been told what kind of precautions should be taken.
New Change In Mortgage System
The FHFA has instructed America’s two largest mortgage companies – Fannie Mae and Freddie Mac – to prepare to accept crypto as a valid asset. This change will be implemented gradually, but the indications are clear that this system can start from 2025.
Is It Legal In India?
Like cryptocurrency, crypto loans are also unregulated in India. That is, such transactions do not come under any regulatory framework. However, when you convert cryptocurrency transactions into rupees and deposit them in the bank account, you have to pay tax at the rate of 30 percent on that transaction. In such a situation, if you want to take a loan against cryptocurrency and use it in the world outside the crypto exchange, then it can prove to be very expensive.
New Benefit For Crypto Holders
- For those who have already invested in tokens like Bitcoin, Ethereum or Solana, this can be a great opportunity. These tokens will no longer be just a thing to keep in the portfolio, but you will also be able to take a mortgage loan from the bank by using them.
- No credit check: Unlike bank loans, no credit history check is done for crypto loans. In such a situation, the loan you get depends entirely on the amount of crypto currency you have.
- Available anywhere in the world: Bank loans are often available only in your country. But, crypto lending gives you the freedom to take a loan anywhere in the world. There is no need for middlemen for this.
- Instant loan: Crypto loans often provide access to funds within minutes. This is an attractive option especially for those who need immediate cash.
What Was The Effect In The Market?
- While this news is fundamentally positive, the technical charts are currently showing some pressure. Bitcoin is currently at around 107544 level, and according to experts, it can reach 10649 or 104708 in the short term. That is, a slight decline is possible in the short term, but this can become a huge opportunity for long term investors.
- Lack of control: When you take a loan by pledging bitcoin or any crypto currency, you completely lose control over that asset.
- Interest rates: The interest rates of crypto lending are very high. In this way it is a very expensive way to raise funds. Apart from this, it is completely unregulated. Therefore, the lender can change the terms at any time.
Will India Also Be Affected?
This decision has been taken in America, but its effect will be global. Financial institutions in other countries including India will now look towards this model. If crypto starts getting recognition as a mortgage asset, then it will bring changes in the financial systems around the world.
There was a time when crypto was considered speculative. But now the same currency is slowly becoming a part of global finance. After 2025, when its use will start in sectors like mortgage, then it will be proved that digital asset is also trustworthy.
Conclusion
If you want to raise funds through crypto landing, make sure that the cryptocurrency you are pledging is not too volatile. Also, research the interest rates on different trusted platforms. Nothing given in this is investment advice. It is important to consult your financial advisor before making any investment related to crypto and the market. If you have any question regarding this post, then you can tell us by commenting in the comment box given below. Your feedback and suggestions are welcome as always. Thank you.
