Key takeaways:
- Officials in Singapore are working with local financial institutions to create common criteria for vetting clients in the digital asset market.
- Authorities would release an updated set of standards over the course of the following two months covering strategies like “diligence” and “risk management” for the crypto clientele.
According to reports, the Monetary Authority of Singapore (MAS) is drafting guidelines to let local banks screen and offer banking services to cryptocurrency consumers.
As per Bloomberg, banks in Singapore are establishing a set of common guidelines with local regulators to filter out potential clients from the cryptocurrency and digital asset sectors. The decision was made in light of recent industry catastrophes like FTX and Terraform Labs as well as market instability.
The latest development in Terraform Labs comes as Singaporean police claimed in an email on March 6 that “investigations have begun in connection with Terraform Labs.” The email states that inquiries are “ongoing” and Do Kwon is not present in the city-state.
In order to improve their verification process when opening accounts for service providers in all sorts of digital assets, lenders are collaborating closely with the central bank and police. At the time of writing, the project had been going on for around six months.
A report outlining best practices in fields like due diligence and risk management will be the end product of this joint venture. According to Bloomberg’s sources, this study will probably be released within the next two months.
Banks and the Monetary Authority of Singapore (MAS) have been collaborating to improve the account-opening procedure for providers of digital asset services. The forthcoming standards will also cover stablecoins, non-fungible tokens (NFTs), and transferable gaming or streaming credits, according to the persons with knowledge of the situation.
Despite the regulations, “the banks will choose whether to accept these clients based on their risk appetites,” according to individuals with knowledge of the situation.
The MAS stated in a comment to Bloomberg that banks must execute client due diligence procedures “as with any other current or prospective customer” in order to comprehend and control the risk(s) posed by them.
