An Australian retail bank has revised its contract terms to prohibit borrowers from using loans such as mortgages to purchase cryptocurrency.
According a report from Australia Finance Review on Thursday, Bank of Queensland, which is publicly traded on Australia’s stock exchange and one of the country’s oldest retail banks, has confirmed the change of the loan agreements, which now state that “any loan purpose that involves the acquisition of or usage of cryptocurrency is unacceptable”.
The move is the result of concerns over recent price volatility of the cryptocurrency market, as well as Australian regulators’ increasing scrutiny over the nascent space, the report said.
As previously reported by CoinDesk, Austrac, the country’s financial intelligence agency, announced a new rule mandating know-your-customer measures across crypto exchanges in April of this year. The Australia Taxation Office has also been seeking public feedback on how should best tax profits made from cryptocurrency trading.
Bank of Queensland’s decision also comes as most other lenders in Australia are discouraging borrowers from using real-estate mortgages to make high-risk investments.
Citing an anonymous broker in the industry, the report said lenders in the country are currently monitoring borrowers’ accounts for signs funds are being used to trade or purchase cryptocurrencies.
“They are concerned because the Australian Taxation Office, Treasury, the Reserve Bank of Australia and Austrac are crawling all over it,” the broker was quoted as saying.
More widely, major banks globally – including JP Morgan Chase, Citi and Bank of America – have recently moved to ban users from using credit lines to purchase cryptocurrency over fears that a volatile market could leave borrowers unable to repay their debts.
Contract signing image via Shutterstock