Banks in Singapore to Vet Crypto Clients: New Guidance Issued

• Singapore authorities are working with banks to create guidance for vetting crypto clients.
• The guidance will cover stablecoins, nonfungible tokens (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. The project has been ongoing for roughly six months, and the authorities would soon release an industry report outlining best practices in areas like due diligence and risk management. The initiative is set to cover stablecoin and NFTs as well as transferable gaming or streaming credits.

Guideline To Cover Payments, Trading And Transfers Of Assets

The initiative is set to focus on firms that provide services in payments, trading and transfers of assets related to cryptocurrencies. Banks would have the final say in deciding whether to accept cryptocurrency clients based on their risk appetite.

Tightening Regulation Following Recent Turmoil

The guideline to be issued by Singaporean authorities could be considered a way of tightening regulation in the crypto space following the recent high-class collapses of numerous crypto companies resulting in billions of dollars being lost. Silvergate Bank, Signature Bank, and Silicon Valley Bank (SVB) have all had recent issues which has caused some crypto clients needing new banks.

Government Does Not Stop Banks From Doing Business With Crypto Companies

At the moment, the Singaporean government doesn’t stop banks operating in the country from doing business with crypto companies. However, the government does advise them to conduct proper due diligence before taking on any new customers involved with cryptocurrencies or other digital assets related activities such as trading or payments processing services.

Final Decision On Crypto Customers Left To Banks‘ Risk Appetite

In the end it is up to each individual bank’s risk appetite when deciding whether they should take on any new crypto customers or not. They will also need to assess if they can adequately manage any associated risks that come with providing financial services related to cryptocurrencies or digital assets activities..