Crypto giant Coinbase has decided to let U.S. homebuyers use their digital asset holdings as payment collaterals while purchasing a residence. To do so, the exchange has partnered with mortgage firm Better Home and Finance Holding Co. This New York-headquartered mortgage firm is approved by American mortgage finance giant, Fannie Mae.
As digital assets clock notable adoption, Coinbase said, cryptocurrencies like Bitcoin could actually help the next generation of home buyers use their holdings for this real use case. Over 60 percent of crypto investors in the U.S. fall within the ages of 25 and 44, multiple research reports had claimed last year.
Better’s new crypto mortgage service essentially plans to let its modern-day clients use their BTC and USDC holdings to serve as a viable collateral to obtain a home loan, an official announcement said on Thursday.
“Crypto-backed mortgages function just like a conventional home loan, with the same legal protections. The key difference is simple: instead of needing to come up with cash for the down payment, borrowers can pledge their crypto holdings as collateral for a separate loan that’s used to cover the down payment,” the exchange claimed.
For the crypto sector, the development makes for a crucial update that brings digital assets closer to being established at par with traditional ones like gold or fiat currencies.
How will crypto loans work?
Potential homebuyers who have crypto investments will not have to sell their holdings to cover the down payment under the Coinbase-Better partnership.
Instead, the partnership will let borrowers pledge their BTC or USDC holdings to secure a loan.
“if you want to buy a $500,000 home, you can pledge $250,000 in BTC and get a $100,000 loan to cover your cash down payment,” Coinbase explained.
By requiring $250,000, the lender has a massive “cushion” against crypto’s element of volatility. Bitcoin would have to drop more than 60 percent before the value of the collateral drops lower than the loan that was released.
The collateralized crypto will be secured in Better’s Coinbase Prime account for the tenure of the loan. The assets would be returned to the borrower once the loan is repaid.
Coinbase noted that the terms of the loan would remain unaffected by Bitcoin’s price volatility during the course of the loan tenure.
Here’s how borrowers could tap into crypto loans
Those looking to avail this feature will need a Coinbase account where they will have to place the BTC or USDC tokens they wish to get collateralized.
Approved borrowers with a Coinbase One membership can slash their closing costs by up to $10,000. The perk provides a one percent rebate on the total mortgage amount for any loan product offered through the collaboration between Coinbase and Better.
“For example, a Coinbase One member securing a $800,000 mortgage through Better would be eligible to receive a $8,000 rebate in the form of lender closing credits,” the exchange said.
Coinbase One members pledging USDC holdings can also continue to earn rewards to help offset their monthly servicing costs.
Crypto loans picking pace
Given that even the Wall Street giants are also shifting focus towards exploring crypto, digital assets are soon approaching the status of regulated, legitimate assets.
In July 2025, Senator Cynthia Lummins has extended a new bill, called the “21st Century Mortgage Act” — proposing to integrate digital assets with home loan provisions in the U.S.
Earlier this year in February, Kraken also started allowing its Pro users borrow loans against their crypto holdings.
These developments indicate a convergence of legislative momentum and institutional adoption signalling a transformative shift in how digital assets could be perceived by traditional financial establishments in the near future.