U.S. homebuyers may not be interested in crypto-based mortgage payments. bitcoin

United Wholesale MortgageThe company was called a “successful” by the public debut in January via a special purpose acquisition (SPAC) merger, began piloting crypto payments in AugustIn a groundbreaking move for the sector. CNBC’s CEO Mat Ishbia tells CNBC now that the company decided not to test it after testing it.

Ishbia stated that “Due to the combination of regulatory uncertainty and incremental costs in crypto space, it’s clear we won’t be able to expand beyond pilots at the moment.”

The Michigan-based mortgage company tried three different types of crypto – bitcoin, etherAnd dogecoin – and multiple different borrowers to see how the process would work. UWM received its first cryptocurrency mortgage payment successfully in September, followed by five others in October.

However, there wasn’t enough demand. CNBC’s Ishbia says that while borrowers liked it and said it was “cool”, the fact that they could transact crypto wasn’t an important driver.

He said, “There wasn’t enough demand at night to really push the envelope.”

The latest evidence is that many crypto users view it as an asset and not a substitute for money. Although cryptocurrency has seen a rise in value over the past year, most people don’t use it to purchase or sell tangible goods. Most investors prefer to “hold on for dear Life” mentality, which means they hold onto their virtual coins and hope they will rise in value. In the last year, that’s been 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 chair Gary Gensler said they have no plans to impose restrictions on cryptocurrency trading. The infrastructure bill proposes new reporting requirements to cryptocurrency brokers. Coinbase, Andreessen Horowitz and other prominent players have asked regulators for clarification.

UWM – the nation’s second-biggest mortgage lenderQuicken, Detroit-based lending company owned by Rocket Companies – works solely through wholesale channels, meaning that the company employs a fleet of brokers who then connect clients to home loans.

It does not have cryptocurrencies in its own balance sheets. UWM converted any tokens that it received at point of transaction to fiat currencies.

Six homeowners took part and now may face tax for crypto-payments.

The IRS defines digital currencies as bitcoin as property, making a mortgage payment in crypto is considered a taxable event.

The cost basis is always less than the current market price. This difference could trigger income capital gains tax, as well as other taxes such sales tax.

Shehan Chandrasekera is a CPA, head of tax strategy and a CPA. CoinTracker.ioA digital currency tax software firm that assists clients to track and manage crypto through virtual wallet addresses.

UWM might be able pull off this project if there are enough interested borrowers.

CNBC’s Ishbia says that crypto is the best way to communicate with Ishbia “Becoming more mainstream means that we can turn it on anytime. “We know the way to do it.”