Block Earner, a company that recently made headlines in Australia, has unveiled what it claims is the nation’s first bitcoin-backed home loan. This innovative financial product allows borrowers to use their digital assets as collateral for obtaining a cash loan, thus avoiding the need to liquidate their bitcoin holdings.
The structure of this loan offers an alternative for individuals interested in entering the property market while keeping their crypto intact. Eligible borrowers can secure up to half the value of their property using their bitcoin assets, which are kept in institutional-grade custody and managed via Fireblocks. The remaining portion of the mortgage is covered by a traditional home loan from another lender.
Borrowers have flexibility in how they can repay this bitcoin-backed loan—either through cryptocurrency or cash—and can exit the arrangement at any time without facing penalties. According to Block Earner, the bitcoin collateral remains safeguarded and is not lent out to third parties.
As the crypto market continues to gain traction as a store of value, with approximately half of all Australians holding around AUD 20-22 billion worth of digital assets, Block Earner’s approach highlights growing interest in using such assets for traditional financial objectives. The company believes that this product addresses gaps in traditional lending criteria, particularly benefiting younger individuals whose wealth is tied to digital assets.
Redefining Financial Eligibility
This innovative loan not only redefines how financial eligibility can be assessed but also brings about greater flexibility for borrowers. The product enables individuals to offset their repayments using their crypto holdings, thus providing a more personalized lending experience.
Internationally, the U.S. Federal Housing Finance Agency (FHFA) is considering similar approaches, potentially allowing for crypto assets to be included in mortgage applications without the requirement of converting them into fiat currency.
Representatives from Block Earner have emphasized that this product caters to those who wish to maintain their exposure to digital assets while entering the real estate market. They see it as part of a broader trend towards integrating digital assets into traditional financial strategies.
There has been substantial interest in the new offering, with Block Earner reporting more than AUD 110 million worth of mortgage inquiries since its soft launch. The company is currently hosting a national roadshow, which has already visited Sydney and will continue to Melbourne, Brisbane, and Perth.