Coinbase: Are Token-Backed Mortgages the Next Innovation?

Better Home & Finance Holding Company and Coinbase announce a milestone partnership to bring token-backed mortgages to millions of Americans. These mortgages, originated and serviced by Better, the leading AI-native mortgage originator, benefit from the same backing of Fannie Mae as other conforming mortgages. Bitcoin (BTC) and USDC pledges are powered by Coinbase, the largest cryptocurrency exchange in the US.

Americans who qualify for a mortgage with Better will now be able to pledge Bitcoin or USDC as collateral to fund their cash down payment, securing a standard conforming mortgage without liquidating tokenised assets or potentially triggering a taxable event.

A new pathway to homeownership

For decades, the path to homeownership has required Americans to sell assets, liquidate investments or withdraw retirement savings to cover a cash down payment – often triggering capital gains taxes or early withdrawal penalties. 

“Better was founded to make homeownership more accessible for all Americans, and this partnership with Coinbase introduces a new pathway to realising the American Dream for the 52 million Americans who own digital assets,” says Vishal Garg, the CEO and Founder of Better. “Together, we are taking a major step towards truly democratising homeownership for hardworking Americans.”

Market reports suggest 20% of American adults have owned digital assets. Token-backed mortgages empower those who lack sufficient downpayment funds, or prefer to keep those funds liquid, to secure a home loan by pledging their tokenised assets as collateral.

Bridging the generational gap

Homeownership has traditionally favoured older generations and is increasingly out of reach for younger Americans, due largely to the divergence of home prices versus income. According to Coinbase’s 2025 State of Crypto Report, 45% of younger investors say they already own crypto, making younger generations 2.5 times more likely to be token holders.

Max Branzburg, Head of Consumer and Business Products at Coinbase says: “The ability to transform digital wealth into housing access is an exciting milestone in our mission to increase economic freedom.

“Token-backed mortgages are a major first step to unlocking homeownership for the younger generations that have struggled with barriers to saving for a traditional downpayment.”

The NVCA 2025 State of Crypto Holders report highlights that with 67% of token holders being 45 years old or younger and 26% earning less than US$75,000 annually, tokenised-asset ownership is more demographically diverse than commonly assumed.

Key benefits and protections

The token-backed mortgage includes several key borrower benefits designed to provide stability. Unlike traditional securities-backed loans, there are no margin calls or top-ups. If BTC drops in value, the mortgage terms remain unchanged and market movements alone never trigger liquidation.

Collateral is only at risk of liquidation in the event of a 60-day payment delinquency, similar to conforming mortgages. Furthermore, for users pledging USDC, the assets earn rewards that can help offset mortgage payments, enabling borrowers to reduce their net effective interest rate.

Unlike traditional loans provided by private banks to their best clients, the architecture of Coinbase Custody allows consumers to pledge certain quantities and types of tokens rather than the entire value of their account. Better and Coinbase intend to expand the digital assets eligible for the product over time to include tokenised equities, fixed income and other tokenised real estate assets.

All Coinbase One members who procure a token-backed or regular mortgage product through Better will be eligible for a rebate worth 1% of the mortgage value, capped at US$10,000, to cover closing costs and fees.