With many global fallouts in the industry, Singapore banks are collaborating with the city authorities to establish common standards for screening new customers from the crypto and digital assets industries.
According to those with knowledge of the situation, the lenders are working with the central bank and police to improve their screening procedure when opening accounts for service providers in all categories of digital assets.
The industry-driven effort has been running for about six months, and t a report defining best practices in areas like due diligence and risk management may be issued in the next two months.
According to one of the people, this project, which focuses on businesses providing services in payments, trading, and transfers of these assets, will also cover stablecoin, non-fungible tokens, as well as transferable gaming or streaming credits.
Even with such guidelines, the banks’ willingness to take on risk will be used to determine whether to accept these customers, the sources claimed. According to them, the working group on the project led by banks includes the Monetary Authority of Singapore and the police.
The traditional banking sector has long had trouble providing easy access to the cryptocurrency market since many of them are still cautious of the volatility of digital assets and possible regulatory pressure, especially in the aftermath of high-profile failures at companies like FTX and Terraform Laboratories.
Clients are currently searching for new banks as a result of the failure of US lenders Silvergate Capital Corp. and Signature Bank, which offered payment services to cryptocurrency startups.
There are no rules stopping banks operating in the country from doing business with firms handling cryptocurrencies or other forms of digital assets, said MAS.
Also Read: Australian Parliament Receives a Private Bill to Regulate Crypto
