Cryptocurrency Uncertainty Leads Lender to Nix Pilot Program
United Wholesale Mortgage, the U.S.’s second-largest lender, decided it won’t be the first to accept bitcoin, citing its incremental costs and regulatory uncertainty.
NEW YORK – United Wholesale Mortgage announced it will not proceed with its planned rollout to accept cryptocurrency, such as bitcoin, for mortgage payments. This summer, the nation’s second-largest mortgage lender announced that it would offer the industry’s first pilot program to accept cryptocurrency for mortgage payments.
However, the company changed its mind. CEO Mat Ishbia told CNBC that they realized it wasn’t worth pursuing a national rollout after the initial test.
“Due to the current combination of incremental costs and regulatory uncertainty in the crypto space, we’ve concluded we aren’t going to extend beyond a pilot at this time,” Ishbia said.
In the pilot program, United Wholesale Mortgage tried three different cryptocurrency options – bitcoin, ethereum and dogecoin. It accepted its first cryptocurrency mortgage payment in September. But demand was lower than expected, Ishbia said. Borrowers “said it was cool,” but they were not more drawn to using bitcoin.
“There was not enough demand at the end of the day to really push the envelope too hard,” Ishbia said.
The six homeowners who took part in the pilot program could now face a tax bill for making a payment in crypto. The IRS classifies digital currencies as property and, unlike U.S. dollars, can trigger a capital gains tax.
According to CNBC analysts, United Wholesale Mortgage’s pilot program adds to the evidence that suggests many cryptocurrency users see it more as an investment and less as a replacement for government-issue money.
Source: “Second Largest U.S. Mortgage Lender Ditches its Plan to Accept Payments in Bitcoin,” CNBC (Oct. 15, 2021)
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