Singapore Banks to Vet Crypto Clients: New Guidance Issued
• Singaporean authorities are working with banks to set uniform standards for vetting cryptocurrency clients.
• The guidance will cover stablecoins, non-fungible tokens (NFTs) and services related to 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.
Overview
Singapore authorities are currently working with banks and other lenders to set uniform standards for vetting cryptocurrency clients. The guidance will cover stablecoins, nonfungible tokens (NFTs) and firms providing services in payments, trading and transfers of these assets. Banks would decide whether they want to take on crypto clients based on their risk appetite.
Vetting Criteria
The initiative is set to 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.
Reasons for New Guidance
The guideline is being issued by Singaporean authorities as a way of tightening regulation in the crypto space following the recent high-profile collapses of multiple crypto companies last year which resulted in billions of dollars lost. In addition, Silvergate Bank, Signature Bank, and Silicon Valley Bank’s (SVB) collapse has also caused some crypto clients scrambling for new banks.
Government Policy
At the moment, the Singaporean government does not stop banks operating in the country from doing business with crypto companies; however they are encouraging them to be vigilant when it comes to onboarding new customers involved with cryptocurrencies or digital assets by issuing best practices guidelines related to due diligence and risk management.