Singapore authorities are working to establish guidelines for banks on vetting clients in the crypto industry. Banks in Singapore have been collaborating with authorities for the past six months to create uniform standards for screening potential customers from the digital assets space. This effort is being led by banks and police, with the Monetary Authority of Singapore (MAS) also taking part to fine-tune the vetting approach for service providers of all types of digital assets.
New Guidelines to Focus on Payment Services Companies
A comprehensive report will be created to focus on companies offering payment services, including stablecoins, NFTs, and gaming credits. The report is expected to outline best practices in areas such as due diligence and risk management and will be published within the next two months.
Currently, there are no rules prohibiting banks from operating in Singapore and engaging with crypto firms or other digital assets companies, according to the country’s central bank. Banks have the right to decide whether to accept these clients based on their risk appetites, even with these guidelines in place.
The MAS has 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.”
Challenges in Singapore’s Crypto Sector
Despite positioning itself as a key financial hub for the crypto industry, Singapore has faced challenges, including the failures of Terraform Labs (TFL) and Three Arrows Capital (3AC), forcing increased scrutiny and proposed stricter regulations on retail crypto trading in the sector.