According to a 2022 survey by Bitstamp involving 28,000 participants from 23 countries, many investors believe cryptocurrency will see mainstream adoption within the next decade. The practical utility of digital currencies is becoming evident, with both individuals and corporations using crypto for everyday needs — from investments to salaries, cross-border transactions, and even real estate purchases. One innovative development in this space is the crypto-backed mortgage, allowing long-term holders to buy property without selling their crypto assets.
What is a crypto-backed mortgage?
A crypto-backed mortgage allows you to secure a real estate loan by using your cryptocurrency as collateral instead of converting it into fiat. This means you can finance a home purchase while retaining ownership of your crypto. Companies like Milo, Figure, and Ledn are some of the early providers offering this financial product.
How does it work?
Once you apply, the lender reviews your crypto portfolio to determine how much you can borrow. Typically, the collateral must equal the loan amount — for example, a $500,000 loan will require $500,000 in digital assets. The lender will specify the interest rate and repayment terms. You can make monthly payments in supported cryptocurrencies or fiat. Once the loan is fully repaid, your crypto is returned to you.
Benefits of crypto mortgages
The main advantage is avoiding the need to sell your digital assets. This helps you avoid capital gains taxes and allows your holdings to continue appreciating. Unlike traditional loans, crypto mortgages often have fewer requirements — less documentation, faster approvals, and minimal identity or credit checks. It also provides opportunities for borrowers who may not have steady income or conventional employment history.
Risks and potential downsides
Market volatility is a significant risk. If the value of your crypto collateral drops, the lender may issue a margin call — requiring you to deposit more assets. If not met, they may liquidate part or all of your holdings. For instance, Milo issues a margin call if collateral drops to 65% of the loan value and can liquidate at 30%. Another limitation is that most lenders only accept a few major cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), USDC, USDT, and Gemini USD.
Key factors when choosing a lender
As with any mortgage, it's critical to compare providers. Consider the following:
– Interest rates and fees
– Maximum loan amount available
– Collateral requirements
– Margin call thresholds
– Repayment schedule and duration
– Approval time and verification processes
– Supported cryptocurrencies
Crypto-backed mortgages are still relatively new. As Citigroup points out, introducing cryptocurrency into the credit profile increases the overall risk of a loan. If crypto prices fall significantly, borrowers may lose their collateral. Analyst Jon D. Markman from Weiss Ratings notes that while this loan structure appears beneficial in a rising market, it is vulnerable in times of declining crypto and real estate prices. Since its 2021 peak of $66,000, Bitcoin has seen substantial volatility, and rising interest rates add further pressure to the housing market.
Still, this financial instrument reflects the increasing integration of digital currencies into real-world finance and may play a role in legitimizing crypto as an asset class. As blockchain adoption grows, crypto mortgages could become more accessible and widespread.
Currently, Monero holders cannot directly access crypto-backed mortgages, as most lenders don’t accept XMR as collateral. However, by converting XMR to an accepted coin like BTC or USDC, Monero users may be able to participate in similar lending programs.
Regardless of your goals — whether buying real estate or storing value — a reliable Monero wallet is essential. XMRWallet is an open-source, browser-based solution that enables fast and secure Monero transactions. It’s free to use, requires no registration, and provides full control over your private keys. Whether you’re trading, investing, or simply sending XMR, XMRWallet is a practical tool for safeguarding your Monero.
