• Singapore 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 of Initiative
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.
Tighter Regulation Following Turmoil
The guideline to be issued by Singaporean authorities could be considered a way of tightening regulation in the crypto space following high-profile collapses last year resulting in billions of dollars lost. The recent collapse of Silvergate Bank, Signature Bank, and Silicon Valley Bank (SVB) has also resulted in some crypto clients scrambling for new banks. At the moment, Singapore does not prevent banks from doing business with crypto companies.
Risk Management Best Practices
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The industry report outlining best practices in areas such as due diligence and risk management is expected soon once discussions go public. The guidance will help banks assess risks associated with taking on different types of crypto customers while ensuring that they adhere to legal requirements such as anti-money laundering laws.
By issuing this guidance, Singapore is looking to ensure that its banking sector remains a safe place for both traditional services providers and those involved in digital assets like cryptocurrencies and NFTs alike . This way it can ensure that customers can continue using financial services without any issues arising from lax regulations or lack of knowledge about risks associated with certain activities related to cryptocurrencies