Singapore Authorities to Set Best Practices for Crypto Client Vetting in Banks
Singapore officials are collaborating with local banks to develop uniform standards for evaluating customers in the digital asset sector in the aftermath of significant global disruptions in the industry.
The Monetary Authority of Singapore and the police have been working with lenders in the country to refine their approach to onboarding crypto service providers, Bloomberg reported, citing people familiar with the matter.
The report claimed that the initiative has been ongoing for approximately six months, and a statement describing best practices in areas such as risk management and due diligence may be released in two months.
The guidelines will also encompass stablecoin, transferable gaming or streaming credits, and non-fungible tokens (NFTs).
Despite the regulatory guidelines, it will be up to banks to determine whether to accept crypto clients based on their risk appetite.
“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,” the MAS said in a comment to Bloomberg.
“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.”
Although financial institutions in Singapore are allowed to do business with digital asset management firms or other such companies, some firms have experienced difficulties with account creation, primarily because local banks were concerned about the potential for illegal cash flows and other illicit activities.
Singapore, in line with other countries, has created a licensing system for the crypto industry and has also proposed more restrictions on crypto trading
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