The Monetary Authority of Singapore (MAS) is reportedly developing new guidelines for banks to better screen cryptocurrency accounts. The guidelines will focus on enhancing the screening standards for financial institutions and their customers in the digital currency space. The MAS aims to promote a safer and more secure crypto ecosystem by ensuring that banks follow due diligence processes, including the assessment of risks associated with digital assets, before onboarding customers. This move is expected to bring further clarity and stability to the growing field of cryptocurrencies in Singapore.
Singapore is making further efforts to establish guidelines for banks in vetting cryptocurrency clients. In fact, the Monetary Authority of Singapore (MAS) is collaborating with banks and police for the past six months to create uniform standards for screening potential customers from the crypto industry. Banks in the city-state have not been restricted from engaging in business with firms that handle cryptocurrencies or other forms of digital assets. However, such banks are still reserving the right to accept clients based on their risk appetites, even with the new guidelines in place.
MAS has joined in on the collaborative approach led by banks and police to fine-tune the vetting approach for account opening for service providers in all types of digital assets. Additionally, in the next two months, a separate comprehensive report will be published to focus on companies offering payment services that cover areas such as stablecoins, NFTs, and gaming credits. The report is expected to outline best practices in areas like due diligence and risk management.
Cryptocurrency companies used to see Singapore as a hub for financial operations. However, the failure of several companies, including Terraform Labs (TFL) and crypto hedge fund Three Arrows Capital (3AC), has prompted regulators in Singapore to increase scrutiny in the sector and propose stricter regulations on retail crypto trading.
As with any other current or prospective customer, banks are required to conduct customer due diligence measures to understand and manage the risks posed by them. Banks themselves determine whether to start or continue a banking relationship with a customer, balancing commercial considerations and business risk tolerance.
In summary, the new guidelines for banks in vetting cryptocurrency clients are set to establish uniform standards for screening potential customers from the crypto industry. The collaborative approach is aimed at fine-tuning the vetting approach for service providers of digital assets. The comprehensive report that will be published in the next two months will cover areas such as stablecoins, NFTs, and gaming credits while outlining best practices in areas like due diligence and risk management.