Cryptocurrency fever comes to US mortgages
By Emilio J. Lopez
Miami, Jan 31 (EFE).- The adoption of cryptocurrencies continues to gain ground in the United States, with bars, businesses, automatic teller machines utilizing them and, now a Miami financial tech company is proposing the possibility of using them for mortgage loans.
The world of financial services is experiencing a revolution. The classic bank is no longer the only actor: with cryptocurrencies as a basis, the Miami-based tech firm Milo has just launched “Crypto Mortgage” to take advantage of the currencies – at present only Bitcoin – to invest in US real estate.
“We noticed that there were international customers with an interesting set of assets in cryptocurrencies for whom it was difficult to quantify them for a conventional mortgage loan” in the US, Josip Rupena, Milo’s president and founder, told EFE.
Rupena quickly realized that this opened up an “opportunity” for his company and in 2021 this gave rise to a new financial solution for customers “who want to buy a property without having to sell their ‘crypto’ to pay in dollars,” as occurs with a conventional mortgage.
The success of these innovative “crypto-mortgages” has been such that Milo currently has a waiting list of 6,000 people who “want to buy a property and make their monthly payments in cryptocurrencies.”
“There’s a lot of demand from customers all over the world and we’re processing mortgage loans” in digital currency with interest rates between 5 percent and 7 percent, said Rupena, who is of Chilean origin but was raised in Miami and graduated cum laude in Finance from the University of Miami.
Regarding the advantages of the “crypto-mortgage,” Rupena said that one is that it offers financing for up to 100 percent of the purchase without an initial down payment in dollars, and more quickly than with a conventional mortgage.
In addition, the investor’s cryptocurrency assets do not suffer the erosion of “opportunity costs,” that is, investors “don’t have to sell their cryptocurrencies and see later, over the years, how their value rises,” the creator of the world’s first crypto-mortgage said.
Rupena, who started his career in finance at Goldman Sachs, said that “the world still doesn’t understand the value of this customer segment” or of the “opportunities” it offers and the new crypto financial services that are in the offing.
What is certain is that the attraction for cryptocurrency mortgage applications has become a social phenomenon, as is clear in Miami, where recently a popular nightclub – E11even – began accepting payment for bar and other tabs in Bitcoin.
The Miami City Hall announced last summer its interest in becoming the first city to create its own virtual currency: MiamiCoin, a CityCoin cryptocurrency.
Although the city hall is not associated with this initiative, Mayor Francis Suarez has come out as an enthusiastic defender of cryptocurrencies and Bitcoin in the so-called “Magic City.”
Suarez has been provided “great support and is doing a lot for the technology community in Miami,” said Rupena, whose company was recently praised by the mayor for launching financial services like crypto-mortgages.
In this global economic ecosystem, the 2021 Bitcoin conference, the largest event in the history of virtual currency, was held in Miami with huge attendance and optimistic messages about how this paradigm of financial freedom can “change everything.”
In fact, Suarez said he felt very happy that it was Miami that was selected to succeed Los Angeles as the site of the conference, commenting that for months an “unprecedented” number of companies, tech firms and investors have chosen to move to the South Florida metropolis.
The “cryptocurrency segment continues to grow in importance and we aspire to launch new (digital) solutions,” said Rupena, who formerly worked as a financial adviser for Morgan Stanley and now serves international investors in 63 countries, both with digital currency and mainstream investments.
Regarding the strength and safety of cryptocurrencies, he said that in 2017 the world’s cryptocurrencies were “valued at $400 billion and today (they’re) worth $2 trillion overall,” despite the fact that numerous countries have warned about their volatility and lack of transparency.
One Latin American country, El Salvador, last September became the first in the world to adopt Bitcoin as legal tender, a move that the International Monetary Fund wants President Nayib Bukele to reverse.
The adoption of a cryptocurrency as legal tender poses serious risks for financial integrity and the market, financial stability and consumer protection and can cause passive fiscal contingencies, the IMF said.