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United Wholesale Mortgage announced it will not be proceeding with its planned rollout to accept cryptocurrency such as bitcoin for mortgage payments. The second-largest mortgage lender announced this summer that it would be the industry’s first pilot program to accept cryptocurrency for mortgage payments.
However, the company’s CEO, Mat Ishbia, told CNBC that after the initial test, they realized it wasn’t worth pursuing a national rollout. “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 told CNBC.
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 were not more drawn to it, he said. “There was not enough demand at the end of the day to really push the envelope too hard,” Ishbia said.
The six homeowners who did take 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 it can trigger a capital gains tax.
CNBC reports that United Wholesale Mortgage’s pilot program is more evidence to show that many cryptocurrency users treat it like an investment and less so as a replacement for money.