• Singapore authorities are working with banks to develop new guidance for vetting crypto 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 own 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 central bank and police have been helping banks to work on their vetting process when opening accounts for service providers in the cryptocurrency and digital asset space. The initiative is set to cover stablecoin and NFTs as well as transferable gaming or streaming credits.
Covering Payments, Trading & Transfers of Assets
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. This guideline could be considered a way of tightening regulation in the crypto space following the recent high-class collapses last year which resulted in the loss of billions of dollars.
Silvergate Bank & Silicon Valley Bank Collapse
The recent collapse of Silvergate Bank, Signature Bank, and the Silicon Valley Bank (SVB) has also put resulted in some crypto clients scrambling for new banks. At the moment, the Singaporean government doesn’t stop banks operating in the country from doing business with crypto companies. However, it is believed that this latest guideline could help alleviate some risks associated with such transactions by setting industry best practices for due diligence and risk management purposes.
Risk Appetite Dictates Acceptance
Banks will decide whether they want to take on crypto clients based on their own risk appetite as determined by these guidelines once issued by Singaporean authorities shortly. This could help ensure that cryptocurrencies remain a safe form of investment while also preventing any potential losses caused by fraudulent transactions or mismanagement among other risks associated with cryptocurrencies investments or trading activities.
In conclusion, this latest guideline from Singaporean authorities is set to ensure that cryptocurrencies remain a safe form of investment while also helping banks manage any potential risks associated with accepting cryptocurrency clients into their banking systems effectively.