Proposals for incorporating crypto-backed mortgages have raised concerns among US senators who point to potential risks to the financial system.
Senators Scrutinize Crypto-Backed Mortgage Proposals
US Senators, including Jeff Merkley and Elizabeth Warren, have expressed concerns regarding the introduction of crypto-backed mortgages through government-sponsored entities. This may affect financial stability and the acceptance of cryptocurrencies in traditional financial systems.
Risks to Housing Markets Highlighted
Senators argue that expanding mortgage underwriting criteria to include unconverted crypto assets might destabilize housing markets. The Federal Housing Finance Agency (FHFA) is assessing the feasibility of this approach.
Echoes of 2008 in Crypto Mortgage Concerns
Citing the 2008 crisis, senators emphasize that risky financial practices can lead to severe economic repercussions. So far, no significant funding has been allocated, and current discussions focus on secure, regulated exchanges.
Discussions surrounding crypto-backed mortgages underline warnings about the risks associated with introducing new financial instruments based on volatile assets.
