Crypto + Relo: Mobility industry impacts

Impacts of cryptocurrency investing are just beginning to emerge in the mobility industry. Here are some things to know.

 

Early applications relating to real estate transactions involving virtual assets are becoming more common. Mortgage loan products that accommodate the use of volatile cryptocurrencies as collateral in the same way a homebuyer seeking a traditional mortgage might offer investment accounts, savings, or other property are also just beginning to appear.

Mobility managers should begin to assess the potential impacts and risks of these arrangements given the popularity of cryptocurrency investing. Policies may soon need to establish guardrails to protect mobility investments and address the intersection of cryptocurrency transactions and financing with mobility benefits.

 

Cryptocurrency in real estate transactions

One way mobility managers may begin to see crypto begin to appear in their day-to-day work is with home purchases, whereby a transferring employee wishes to use cryptocurrency assets to purchase a home at destination by transferring their bitcoin or similar crypto assets to a property seller in lieu of all or part of the contracted purchase price. The feasibility of such an arrangement depends on the seller’s willingness to receive bitcoin in lieu of cash for any portion of the purchase price exceeding the amount they are obligated to direct to mortgage lenders, home equity loan financers or other lienholders.

This is likely to gain traction in some markets sooner than others. For instance, locations with heavy tech industry presence may lead the way since buyers and sellers in those markets may be more likely to be early adopters of using crypto assets for complex transactions like real estate.

For mobility program managers, the practical implications to consider include:

  • Using crypto assets for a home purchase financing could negatively impact mortgage qualifying since underwriters are unlikely to consider such holdings as they might other traditional assets given the volatile nature of the crypto market.
  • There may be a need to adopt disclaimers to establish that any delays or duplicated costs that result from an employee’s attempt to use crypto assets for a home purchase would not be the responsibility of the company.
  • It is also prudent to reiterate that substitution of benefits is not allowed, since an employee that is able to purchase with cryptocurrency, or cash for that matter, might be compelled to request compensation in lieu of coverage of traditional purchase expenses.
  • U.S. homeowners disposing of departure location properties should be discouraged from negotiating sale terms with outside buyers that involve transfer of crypto assets since doing so could compromise eligibility for third party home sale assistance programs.
     

The intersection of cryptocurrencies and mobility provisions will continue to evolve but could become more complicated as the transactions become more commonplace and the traditionally volatile crypto space becomes more regulated. U.S. Bank will continue to monitor and report on crypto trends so that mobility program managers can be prepared to adjust policies as needed to minimize risks.

 

Read more about how homebuying and mobility trends impact employees and connect with corporate relocation experts and home lending specialists.

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Contributors to this article include: Mark Zandi, Chief Economist, Moody’s Analytics; Lois Johnson, Senior Director, U.S. Mobility, ADP; Andreas Strohschein, Enterprise Rewards Partner, Mobility, Roche/Genentech; Aaron Tyler, Mortgage Loan Officer, U.S. Bank; and, Russ Haynie, Principal, Russ Haynie Consulting Services.

U.S. Bank is not affiliated with any contributing individuals or companies mentioned in this article.

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Loan approval is subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts. Interest rate and program terms are subject to change without notice. Mortgage, home equity and credit products are offered by U.S. Bank National Association. Deposit products are offered by U.S. Bank National Association. Member FDIC.