• Singapore authorities are working with banks on new guidance for vetting crypto clients.
• The guidance will cover stablecoins, nonfungible tokens (NFTs) and firms providing services in payments, trading and transfers of these assets.
• Banks will decide whether they want to take on crypto clients based on their risk appetite.
Singapore Developing New Guidance for Crypto Clients
Singapore authorities are currently working with banks and other lenders to set uniform standards for vetting cryptocurrency clients. 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. This initiative is set to cover stablecoin and NFTs as well as transferable gaming or streaming credits, focusing on firms that provide services in payments, trading and transfers of these assets.
Guidance Focused On Risk Management
The project has been ongoing for roughly six months, with an industry report outlining best practices in areas like due diligence and risk management expected soon. Banks would have the final say in deciding whether to accept cryptocurrency clients based on their risk appetite. This initiative could be considered a way of tightening regulation in the crypto space following the recent high-class collapses, such as those seen at FTX and Terraform Labs last year resulting in billions of dollars lost, as well as Silvergate Bank, Signature Bank, SVB recently scrambling for new banks.
Crypto Companies Not Banned In Singapore
At the moment, the Singaporean government doesn’t stop banks operating in the country from doing business with crypto companies. Even so, Monetary Authority of Singapore (MAS) has warned investors about potential scams related to Initial Coin Offerings (ICOs). MAS has also issued a warning against investing in digital tokens that promise guaranteed returns or come without any form of insurance protection or legal rights attached to them.
Stricter Regulations Coming?
It remains unclear how much stricter regulations will become but some feel it may be inevitable given how competitive this sector is getting globally – with countries like China actively developing their own digital currencies -and governments looking into ways of controlling money laundering activities taking place online using cryptocurrencies .
The initiative being developed by Singaporean authorities looks set to help protect investors from fraudsters while also allowing legitimate businesses associated with cryptocurrencies access to banking services more easily than before – something which should generally benefit all parties involved when complete later this year.