Agreed and I think that's the point, even if it's not rehypothicated, it is at least moved to the local fiat lender to back the loan.
Discussion
I juat know the banks wouldn't let me buy a mortgage without putting sats in Coinbase. If that's your only option to get a mortgage, I could see taking the risk, but that's not the way it is being marketed.
At least with a bank, they have government guarantees, which do not extend to exchanges.
We trust the banks, because we trust the government. Yes you heard me, we trust the government 😂