Singapore to help banks set standards for vetting crypto businesses

Singapore’s central bank and the police are reportedly working on establishing guidelines that would help traditional financial institutions in the city-state to improve the process of accessing potential crypto clients. 

Bloomberg reported on April 6 that the Monetary Authority of Singapore (MAS) and the police have been involved in a project to assist banks in fine-tuning their screening methods for opening accounts for customers in the crypto industry. 

Part of the proposed guidelines is focused on cryptocurrency companies that offer payment services, crypto trading, and transfers. It will cover stablecoins, non-fungible tokens (NFTs), and transferable gaming or streaming credits. 

As stated in the report, the initiative has been ongoing for about six months, with an information on best practices in aspects such as due diligence and risk management expected to be released in two months. 

While MAS told Bloomberg that no rules hinder banks from servicing crypto clients, the lenders “make their own determination of whether to start or continue a banking relationship with a customer, balancing between commercial considerations and business risk tolerance.”

The latest development comes after the collapse of three banks in the United States — Silvergate Capital, Signature Bank, and Silicon Valley Bank — which catered to crypto firms. As such, regulators have become increasingly wary of crypto, with talks of implementing more brutal regulatory policies for the cryptocurrency industry. 

In response to the fall of the three lenders, the US government is looking to strengthen banking regulations to prevent future crises. In the United Kingdom, crypto companies are having difficulty accessing banking services elsewhere.