• Singapore authorities are working with banking institutions 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 would have the ultimate say in deciding whether to accept cryptocurrency 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. 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. The 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.
Guideline Focused Areas
The guideline issued by Singaporean authorities will focus on several areas including due diligence, risk management, and other best practices related to cryptocurrencies. Banks will have the final say in deciding whether to accept cryptocurrency clients based on their risk appetite. Moreover, it will also help strengthen regulation in the crypto space following some high-class collapses such as FTX and Terraform Labs last year, which resulted in billions of dollars of losses.
Singapore’s Current Stance On Crypto
At the moment, the Singaporean government doesn’t stop banks operating in the country from doing business with crypto companies. However, some recent collapses such as Silvergate Bank, Signature Bank, and Silicon Valley Bank (SVB), has made crypto clients scramble for new banks. This further emphasizes the need for tighter regulations within this industry to ensure customer safety and security of investments made into cryptocurrencies by individuals or corporations alike.
Industry Report Outlining Best Practices
Sources close to the matter told Bloomberg that an industry report outlining best practices is soon expected to be released by the authorities involved in setting up these guidelines which will help banks decide whether they want take on crypto clientele based on their risk appetite levels or not. This report is expected to be released after a project that has been ongoing for roughly six months comes to its completion stage soon enough.
The initiative taken up by Singaporean authorities is a step forward towards making sure that customers investing into cryptocurrencies are safe from any fraudulent activities or money laundering attempts that might occur if proper regulations are not put into place beforehand. It is yet unclear how much impact this initiative might have when implemented but it surely looks promising nonetheless!