IN THE US, CRYPTO-BACKED MORTGAGES ARE ON THE RISE
The rise in crypto adoption has led to digital asset banks and real estate lenders. The city of Miami operates primarily in the area of digital assets. Mayor Francis Suarez and Florida County Governor Ron DeSantis are crypto advocates.
As the State of Florida and the City of Miami demand a new crypto hub, the Weiss Ratings is sounding the alarm.
Weiss Ratings Sounds A metal alarm over Crypto-Backed Mortgages
On Tuesday, Weiss Ratings published an article raising concerns about crypto-backed mortgages.
The report highlights that 'Miami's start is running for a mortgage loan with cryptocurrency.'
Florida-based digital bank Milo adopts crypto to secure mortgage loans. Milo plans to extend this further by providing these as collateral-backed securities to property managers and insurance companies.
Weiss estimates refer to a combination of risky home loans and the Great Recession of 2009.
In the last week of April, US mortgage rates stood at 5.10%, up 212 points compared to April 2021. US house prices also rose sharply, while mortgage rates rose sharply due to inflation and inflation. market about Fed monetary policy. .
In February, the S&P / CS HPI Composite - 20 n.s.a increased 20.2% year on year.
Although real estate prices and mortgage rates rose sharply, Bitcoin (BTC) and the broader crypto market declined.
As Bitcoin and the broader market show strong ties to the NASDAQ and the Fed are about to embark on a journey towards adjusting monetary policy, crypto-backed loans could be in dire straits.
According to the report, CEO Josip Rupena says there is a waiting list for 8,000 home buyers in Texas, California and New York.
The demand is not surprising given that home buyers can borrow up to 100% of the purchase price, with a mortgage rate of up to 3.95%. Home buyers do not need to sell their crypto, Milo accepts Bitcoin, Ethereum (ETH), and stablecoin as collateral.
Miami in Overdrive to Become a Digital Asset and Innovation Center
It follows Milo in the space of crypto-backed mortgage crypto company XBTO. In April, FX Empire reported that XBTO is in the process of finalizing a multi-billion Bitcoin-collateralized mortgage loan in Miami.
The growing activity in the crypto space stems from the desire to become a new crypto hub.
In January, Mayor Suarez confirmed he would take his first three payments to BTC. The City of Miami re-launched MiamiCoin (MIA) in June 2021, the first CityCoins on the market.
Powered by Stacks (STX), CityCoins is a "protocol that makes smart contracts on the Bitcoin network." Miners can transfer STX to the Stack protocol. CityCoins miners get 70% of all STX tokens stacked on MiamiCoin. Miners can dig for an award-winning MIA to earn BTC prizes.
The remaining 30% goes to City Wallets. In the case of Miami, Mayor Suarez can exchange fiat-collected tokens or mine STX tokens to earn BTC.
It remains to be seen how US lawmakers and the SEC will view crypto-backed mortgages. Bitcoin has slipped to less than $ 30,000, and the rise of crypto-backed loans will test the waters.