Singapore Helps Banks To Set New Guidance To Check On Crypto Clients
- Singapore authorities are collaborating with city-state lenders to establish standardized rules for assessing prospective clients from the crypto industry.
- The project has been running for around six months.
- This project will also encompass stablecoins, NFTs, and transferrable gaming or streaming credits.
According to a Bloomberg report citing persons with knowledge of the situation, Singapore’s central bank and police agencies have been assisting banks in setting common guidelines for fine-tuning their screening strategy when creating crypto accounts.
The central bank and police have assisted banks in fine-tuning their verification procedures when creating accounts for service providers in all forms of digital assets. The initiative has been continuing for about six months, and an industry report covering best practices in areas like due diligence and risk management may be issued in the next two months, according to the sources, who asked not to be named because the conversations are private.
The report on payment service providers would include stablecoins, NFTs, and gaming credits. Even with such criteria, the banks would determine whether to accept these customers depending on their risk tolerance, according to the sources.
According to the Monetary Authority of Singapore (MAS), there are no restrictions prohibiting Singapore banks from doing business with enterprises dealing with cryptocurrencies or other types of digital assets.
“Banks decide whether to initiate or prolong a banking relationship with a client, balancing commercial reasons and business risk tolerance.”
Singapore has witnessed its fair share of crypto controversies involving Singapore-based companies such as Terraform Labs and crypto hedge fund Three Arrows Capital.
For the last several weeks, US authorities have been pushing down on banks that handled cryptocurrency users in an effort to cut the cryptocurrency sector off from financial services. As a result of the occurrence, cryptocurrency firms are scurrying to locate financial partners and countries in which to do business.
Singapore is one of the key countries that has developed a licensing structure for the sector and has recommended further restrictions on retail crypto trading.
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