The Bank of Queensland has changed its contract terms to prevent borrowers from using home loan equity to purchase cryptocurrencies. The new terms in the bank’s loan contracts state “any loan purpose that involves the acquisition of or usage of cryptocurrency is unacceptable”. The move comes as Australian financial regulators step-up their scrutiny over cryptocurrencies following excessive market volatility.
How Could You Use A Home Loan to Buy Cryptos?
Some home loans come with a bank card and are considered flexi-loans. They enable the borrower to essentially reborrow any money they have already paid off their loan. For example, if someone borrows $20,000 and they pay off $5,000, they can then spend that $5,000 just like a credit card with an overdraft facility. This equity in the home loan would then be used to purchase cryptocurrencies via an exchange. This could prove problematic, especially if the value of the cryptocurrency tanks.
Australian Tax Office Actively Monitoring the Space
The Australian Tax Office (ATO) is actively monitoring for unexplained signs of wealth and assets. By using state-of-the-art data-matching technology, the ATO has the ability to trace funds using public keys and transactions over the various crypto networks. In addition to their software, centralized exchanges – which Vitalik Buterin lambasted earlier in the week – keep records of all their users. This means that the ATO can request this information should they suspect someone of tax avoidance.
Australians Looking for Alternative Methods
This new contract amendment has left a few Australians slightly frustrated. These frustrated few have found a little workaround to “beat the system” – they have turned to Bitcoin ATMs. These individuals are withdrawing the cash from a fiat ATM and then heading over to a high privacy Bitcoin ATM – such as a BitQuick ATM – and changing their fiat into crypto there. While this is highly illegal, the desperation of making a quick buck is almost too great a temptation for some. Malta recently got their first two-way Bitcoin ATM and a new set of crypto-friendly laws – a far cry from the crypto-skeptic Australian market.
Governments from all around the world are taking their stances on cryptocurrencies and blockchain technology. Some – like Malta – are choosing to embrace it, whilst others are trying to fight against it. Malta and South Korea are two of the largest supporters of blockchain adoption, Malta even introduced their first crypto-friendly laws last week paving the way for a potential “Blockchain Island”. It is hoped that once Malta accepts Bitcoin as a recognized currency, other nations will follow suit.
