He objected to the use of USDC as collateral as he says the stablecoin does not generate returns.
He states that it is more logical to sell it directly to make an initial payment without interest costs.
Economist and cryptocurrency critic Peter Schiff reacted with skepticism to the recent launch of mortgages backed by digital assets.
in two publications in X on March 28, Schiff argued that these types of products increase the real cost of purchasing a home and increase the risk for buyers.
In his first message, Schiff pointed out the apparent irrationality of using the USDC stablecoin as collateral for a loan instead of selling it directly and making an initial payment free of additional interest.
“Why borrow money to use USDC as collateral when you can sell it and give an interest-free down payment?” he questioned.
In a subsequent response, he clarified that the stablecoin is blocked as collateral until the loan is paid, without generating any benefit for the owner.
In a second publicationSchiff was more direct about the financial impact:
Cryptocurrency-backed mortgages increase the cost of buying homes. Not only must buyers pay interest on the home loan, but also on second mortgages backed by cryptocurrencies. In reality, the borrower is financing 100% of the cost of the home. This increases the risk of default.
Peter Schiff, economist.
Schiff’s statements focus on the double leverage effect and the increased interest burden, which he says makes more the buyer’s position vulnerable to possible falls in housing prices or crypto assets.
This debate arises in the context of the announcement made by Coinbase and Better on March 26, 2026, which allows Bitcoin or USDC to be used as collateral for mortgage loans, compliant with Fannie Mae, without the need to sell the assets, as reported by CriptoNoticias.
The advertisement presents the product highlighting that cryptocurrency holders can obtain liquidity for the initial payment without liquidating their holdings, avoiding capital gains taxes and without the risk of automatic liquidation due to Bitcoin price volatility.
Vishal Garg, CEO of Better, defended the initiative by noting that the goal is to “democratize homeownership” for the approximately 52 million Americans own digital assetsa group that often encounters barriers in the traditional financial system.
While mentioning the possible benefits for cryptocurrency holders, maintaining exposure to the asset and access to traditional rates, Schiff’s criticisms focus on the hidden costs and greater credit risk involved in effectively financing 100% of the operation with double interest payments.