Singapore authorities are doubling down on efforts to unveil a set of guidelines for banks on vetting crypto clients. As such, the banks in the city-state have been working with the authorities for the last six months to establish uniform standards for screening potential customers from the crypto industry.
According to a Bloomberg report, the Monetary Authority of Singapore (MAS) has also joined the collaborative approach led by banks and police involving fine-tuning the vetting approach with respect to opening accounts for service providers in all types of digital assets.
Singapore’s New Approach
A separate comprehensive report will be prepared to focus on companies offering payment services and will cover areas such as stablecoins, NFTs, and gaming credits. It is also expected to outline best practices in areas like due diligence and risk management and is expected to be published in the next two months.
Currently, there are no rules prohibiting banks operating in the country from engaging business with firms handling cryptocurrencies or other forms of digital assets, as confirmed by the Singaporean central bank. The sources familiar with the matter further said the banks will continue to reserve the right whether to accept these clients based on their risk appetites even with such guidelines in place.
Without specifying any details of the project, the MAS representatives said,
“As with any other current or prospective customer, banks are required to conduct customer due diligence measures to understand and manage the risk(s) posed by them. Banks make their own determination of whether to start or continue a banking relationship with a customer, balancing between commercial considerations and business risk tolerance.”
Crypto Troubles in Singapore
Singapore had earlier positioned itself as a key financial hub attracting crypto companies looking for greener pastures.
However, the failures of companies, including Terraform Labs (TFL) and crypto hedge fund Three Arrows Capital (3AC), have forced the regulators in the city-state to increase scrutiny in the sector while proposing stricter regulations on retail crypto trading.