Thomas Daniels
Amid rising property prices and tightening credit conditions, Australian fintech Block Earner has introduced the nation’s first Bitcoin-backed mortgage—a financial innovation poised to reshape traditional home lending. The launch follows a pivotal ruling by Australia’s Federal Court in April, which determined that Block Earner’s crypto-collateralized products do not fall under the definition of “financial products” as outlined in the Corporations Act. As a result, the company is no longer required to hold a financial services license to offer loans secured by digital assets.
Under this new model, eligible borrowers can leverage their Bitcoin holdings to secure a cash loan equivalent to up to 50% of a property’s value. The remaining balance is financed through a conventional mortgage. Custody of the Bitcoin collateral is managed by Fireblocks, a secure digital asset infrastructure platform. This hybrid lending structure provides a pathway to homeownership without necessitating the liquidation of long-term crypto positions—an attractive proposition for Australia’s digitally savvy investors.
Interest rates for the crypto-backed loan begin at 9.5% annually, and repayments can be made in either Australian dollars or cryptocurrency. According to Block Earner, the market response has been substantial, with expressions of interest exceeding AUD 110 million since the product’s announcement.
The innovation also redefines creditworthiness by incorporating digital asset portfolios into risk assessments—expanding beyond conventional metrics such as income, savings, and superannuation balances. This alternative approach may be particularly appealing to younger generations, who are disproportionately represented among cryptocurrency holders.
Global Momentum Builds for Crypto-Backed Lending
Australia’s foray into crypto-collateralized mortgages mirrors emerging developments in the United States. In June, the Federal Housing Finance Agency (FHFA) directed government-sponsored enterprises Fannie Mae and Freddie Mac to examine the feasibility of treating regulated crypto holdings as reserve assets in mortgage underwriting.
Further signaling regulatory momentum, lawmakers introduced a bill in the U.S. House of Representatives that would require federal mortgage agencies to recognize cryptocurrency holdings on regulated exchanges as part of a borrower’s financial profile—without necessitating conversion to fiat currency. If enacted, the legislation could significantly broaden mortgage access for digital asset investors in the U.S. market.
Addressing the Housing Affordability Crisis
Both Australia and the United States are confronting acute housing affordability challenges. In Australia, the average home price stands at nearly ten times the median household income. Sydney’s property market is among the most expensive globally, with prices reaching 14 times median income—second only to Hong Kong. Meanwhile, in the United States, median home prices have surpassed $420,000, or roughly seven times the national median income.
This price escalation has coincided with a surge in homelessness. In the U.S., more than 653,000 people were recorded as unhoused in a single night in January 2023, marking the highest total since national tracking began.
Amid these pressures, the relative purchasing power of Bitcoin has improved. The cryptocurrency has appreciated nearly 87% over the past 12 months, offering long-term holders a potential hedge against real estate inflation. Block Earner’s new mortgage product leverages this dynamic, enabling borrowers to convert digital asset gains into real-world property access.
Financial and Regulatory Implications
The integration of cryptocurrency into mortgage lending introduces new considerations for financial institutions and regulators alike. Block Earner has implemented safeguards such as a 60% loan-to-value (LTV) cap and margin call mechanisms to mitigate the volatility risk associated with Bitcoin collateral. These protective measures are designed to ensure loan stability, even in turbulent market conditions.
As digital assets become increasingly institutionalized, the convergence of crypto and traditional finance is expected to deepen. The expansion of crypto-backed mortgages signals a broader trend toward financial inclusivity, asset diversification, and innovation in credit modeling.
