United Wholesale Mortgage abandons its plan to simply accept Bitcoin and Ethereum


U.S. homebuyers don’t seem too interested in paying their mortgages in cryptocurrencies like bitcoin.

United Wholesale Mortgage, which made its public debut in January as part of a Special Purpose Acquisition (SPAC) merger, first began piloting crypto payments in the industry in August. But CEO Mat Ishbia is now telling CNBC that after testing, the company decided it wasn’t worth it.

“Due to the current combination of incremental costs and regulatory uncertainty in the crypto space, we have come to the conclusion that we are currently not going beyond a pilot project,” said Ishbia.

The Michigan-based mortgage company tried three different types of crypto – Bitcoin, Ether, and Dogecoin – and tried several different borrowers to see how the process would work. UWM successfully accepted its very first cryptocurrency mortgage payment in September and five more in October.

But in the end the demand wasn’t there. Ishbia tells CNBC that borrowers “liked it” and “said it was cool” but the ability to trade in crypto “wasn’t a driver”.

“At the end of the day there wasn’t enough demand to really push the envelope,” he said.

It is the latest evidence that many cryptocurrency users are treating it as an investment rather than a replacement for money. While the prices of cryptocurrencies have increased over the past year, it is still rarely used to buy and sell physical goods. Instead, most investors stick to a “HODL” (hold on for dear life) mentality where they buy and hold their virtual coins in the hopes that their value will increase. Last year that was a good bet – Bitcoin is worth more than five times as much as it was a year ago, while Ether is up more than ten times.

Both Treasury Secretary Janet Yellen and SEC chairman Gary Gensler said they had no plans to restrict cryptocurrency trading. However, the proposed infrastructure bill includes new reporting requirements for cryptocurrency “brokers,” and prominent players in this area, including Coinbase and Andreessen Horowitz, have asked regulators for more clarity.

UWM – the country’s second largest mortgage lender after Quicken, the Detroit-based credit giant owned by Rocket Companies – operates entirely through wholesale channels, which means the company employs a fleet of brokers who then connect customers with home loans.

The company itself does not have any cryptocurrencies on its balance sheet. UWM converted the received tokens into fiat currency at the time of the transaction.

Now, for the six homeowners who participated in the experiment, some may face a tax bill for the payments they made in cryptocurrency.

Since the IRS classifies digital currencies like bitcoin as property, paying a mortgage in crypto is considered a taxable event.

There is always a difference between the amount you paid for the cryptocurrency, which is the cost base, and the market value at the time it was issued. This difference can trigger capital gains taxes in addition to the other taxes you must pay, such as sales tax.

“The one thing a lot of people don’t know is that every time you spend cryptocurrencies to buy a cup of coffee or some type of consumer item, it triggers a capital gains event,” said Shehan Chandrasekera, CPA and Head of Tax Strategy at, a digital currency software company that helps customers track their cryptos through virtual wallet addresses and manage their respective tax obligations.

UWM could pull the project off the shelf in the future, when enough borrowers eventually become interested.

Ishbia tells CNBC that as crypto “It’s becoming more mainstream, we can turn it on every day. We now know how to do it.”