• Singaporean authorities are working with banks to set uniform standards for vetting cryptocurrency clients.
• The initiative is set to cover stablecoin and NFTs as well as transferable gaming or streaming credits.
• Banks will decide whether they want to take on crypto clients based on their risk appetite.
Singapore Working On New Guidance For Crypto Clients
Singapore authorities are currently working with banks and other lenders to set uniform standards for vetting cryptocurrency clients, sources close to the matter told Bloomberg. According to the report, the central bank and police have been helping banks to work on their vetting process when opening accounts for service providers in the cryptocurrency and digital asset space.
Focus On Payments, Trading And Transfers Of Assets
The initiative is set to cover stablecoin and NFTs as well as transferable gaming or streaming credits. It will also focus on firms that provide services in payments, trading and transfers of these assets. Banks would have the final say in deciding whether to accept cryptocurrency clients based on their risk appetite, the sources added.
Tightening Regulation Following Recent Turmoil
The guideline to be issued by Singaporean authorities could be considered a way of tightening regulation in the crypto space following recent collapses like FTX and Terraform Labs which resulted in billions of dollars being lost. The collapse of Silvergate Bank, Signature Bank, and Silicon Valley Bank (SVB) has also put some crypto companies in a difficult situation as they scramble for new banking partners.
Government’s Stance On Crypto Companies
At present, Singapore’s government does not stop banks from doing business with crypto companies operating within its borders. However, it does emphasize that customers should do due diligence before investing money into these businesses by checking if they’re legitimate operators registered with relevant authorities like ACRA (Accounting & Corporate Regulatory Authority). This guidance could help alleviate investor concerns about getting scammed out of their funds when dealing with unregulated entities offering high returns through cryptocurrencies or digital assets investments.
Overall, this new guidance from Singaporean authorities provides an extra layer of security for banks when dealing with cryptocurrency clients by outlining best practices in areas like due diligence and risk management while giving them room to decide which activities they want to engage in based on their own risk appetite levels.
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