The FHFA directive to explore including cryptocurrency in mortgage risk assessments is a positive step for crypto holders. Misinterpreting the directive to require US-regulated exchange custody would be a mistake. Self-custody is common in crypto and offers transparency and security advantages over centralized exchanges. A balanced mortgage framework should support both self-custody and custodial holdings while ensuring verifiability and liquidity standards are met. Policymakers should avoid forcing crypto into outdated models and instead focus on smart verification methods that accommodate decentralization. Understanding decentralized technology is crucial for effective regulation that considers the diverse needs of crypto industry participants.

Read more at Cointelegraph: FHFA Could Expose Homebuyers To Greater Counterparty Risk