• Singapore authorities are working with banks on new guidance for vetting cryptocurrency clients.
• The guidance will cover stablecoins, 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 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. This initiative is set to cover stablecoin and NFTs as well as transferable gaming or streaming credits. The initiative is set to focus on firms that provide services in payments, trading and transfers of these assets.
Focus Of The Guidance
The guidance will focus on due diligence and risk management best practices when it comes to accepting crypto clients. Banks would have the final say in deciding whether to accept cryptocurrency clients based on their risk appetite.
Purpose Of The Regulation
This guideline could be considered a way of tightening regulation in the crypto space following the recent high-class collapses of FTX, Terraform Labs, Silvergate Bank, Signature Bank, and Silicon Valley Bank (SVB).
Government’s Stance On Crypto Businesses
At the moment, the Singaporean government doesn’t stop banks operating in the country from doing business with crypto companies. While talking about this issue during an event last year, Deputy Prime Minister Heng Swee Keat said that “it’s important that we develop a sound regulatory framework for cryptocurrencies” but also emphasized that “we must be mindful of potential money laundering risks associated with digital asset transactions“.
The project has been ongoing for roughly six months now and it is expected that soon an industry report outlining best practices will be released by the authorities covering areas like risk management when opening accounts for service providers in the cryptocurrency and digital asset space.