• Singapore authorities are working with banks to set uniform standards for crypto client vetting.
• The guidance will cover stablecoins, NFTs, and firms providing services in payments, trading, and transfers of these assets.
• Banks will decide whether to take on crypto clients based on their risk appetite.
Singapore Issuing Guidance For Banks On Vetting Crypto Clients
Singapore authorities are currently working with banks and other lenders to set uniform standards for vetting cryptocurrency clients. The initiative is being undertaken by the central bank and police and will provide guidance in areas such as due diligence and risk management. The project has been ongoing for roughly six months, with an industry report outlining best practices soon to be released.
Purpose Of Guidance
The guidance aims to cover stablecoin and non-fungible token (NFT) service providers that offer payment, trading, or transfer services related to cryptocurrencies or digital assets. Banks must also decide if they want to take on crypto clients based on their risk appetite. This could be seen as a way of tightening regulation in the crypto space following recent high-profile collapses of numerous crypto companies last year that resulted in billions of dollars lost.
Current Regulations In Singapore
At present, the Singaporean government does not stop banks operating within its jurisdiction from doing business with crypto companies. In a statement made by MAS’ Deputy Managing Director Ong Chong Tee: “MAS expects financial institutions to assess the money laundering and terrorist financing risks associated with activities involving virtual assets before deciding whether they should conduct such activities.“
Impact On Crypto Space
It remains unclear how this new guidance will affect the local cryptocurrency space but it could help reduce volatility as well as improve investor confidence in digital assets as a whole. It could also help clear up confusion around regulations which have been inconsistent across different countries so far..
Conclusion
Overall, the issuing of this new guidance by Singaporean authorities could have positive implications for both investors in digital assets as well as service providers operating within the space in terms of reducing volatility and improving clarity around regulations across different jurisdictions