Economist and cryptocurrency commentator Peter Schiff has expressed skepticism about the recently launched mortgage loans backed by digital assets.
In two March 28 posts about X, Schiff said that these types of products The real cost of buying a home increases and the risk increases. For buyers.
In his first message, Schiff pointed out the obvious absurdity of using USDC stablecoins as collateral for a loan rather than selling them directly and making an initial payment without additional interest.
“Why borrow money using USDC as collateral when you can sell USDC and give an interest-free down payment?” he asked.
In a subsequent response, he clarified that the stablecoin is blocked as collateral and does not accrue any benefit to the owner until the loan is paid.
In his second post, Schiff addresses the financial impact more directly.
Cryptocurrency-backed mortgages increase the cost of purchasing a home. Buyers will have to pay interest not only on the home loan, but also on a second mortgage backed by cryptocurrencies. In reality, the borrower finances 100% of the home’s price. This increases the risk of default.
Peter Schiff, economist.
Schiff’s statement focused on the double leverage effect and increased interest expense, which he said would further increase profits. Buyer’s position is vulnerable to possible downside such as housing prices and crypto assets.
This discussion arises in the context of an announcement made by Coinbase and Better on March 26, 2026 that will be Fannie Mae compliant and allow Bitcoin or USDC to be used as collateral for mortgages without having to sell assets, as reported by CriptoNoticias.
The ad highlights a product that allows crypto holders to obtain initial payment liquidity without having to liquidate their holdings, avoid capital gains taxes, and risk automatic liquidation due to Bitcoin price fluctuations.
Better CEO Vishal Garg defended the initiative, noting that the goal is to “democratize home ownership” for people. Approximately 52 million Americans own digital assetsa group that often encounters barriers in traditional financial systems.
Schiff’s critique focuses on the hidden costs and greater credit risk associated with effectively funding 100% of operations with dual interest payments, while noting the benefits that crypto holders may derive from maintaining exposure to assets and access to traditional rates.
(Tag Translation)Bitcoin (BTC)
