Singapore Regulators and Banks Develop Crypto Customer Screening Standards
Singapore's monetary authority and police forces are collaborating with traditional banks to optimize their procedures for opening accounts for digital asset service providers. After six months, results and conclusions for risk management and due diligence will be published. The guidelines will cover stablecoins, NFTs, and transferable gaming or streaming credits, with banks reserving the right to make decisions based on their own risk assessment.
Singapore regulators are taking proactive steps to address the challenges posed by the fast-evolving crypto industry. According to a report by Bloomberg on April 6, the Monetary Authority of Singapore (MAS) has been working closely with traditional banks to develop uniform standards for screening potential customers from the crypto industry.
The collaboration has been ongoing for the past six months and has involved the police forces as well. The aim is to help local banks optimize their procedures for opening accounts of digital asset service providers while mitigating risks associated with money laundering and terrorist financing. After six months of cooperation, the results and conclusions for risk management and due diligence will be published within the next two months.
The guidelines will not only address the screening of potential customers, but also cover other pertinent topics in the crypto industry. These include stablecoins, nonfungible tokens (NFTs), and transferable gaming or streaming credits. By setting standards for these issues, regulators hope to create a safer and more transparent environment for the use of cryptocurrencies.
However, it is important to note that the banks will still reserve the right to make decisions based on their own risk assessment, even after the guidelines are published. This flexibility will allow the banks to cater to their own specific circumstances while adhering to the general principles of the guidelines.
The move by Singapore regulators is not surprising, given the increasing prevalence of cryptocurrencies and the need for regulatory oversight. As cryptocurrencies become more mainstream, it is important to have a clear framework that can ensure their safe use while still fostering innovation and growth in the industry.
Singapore has been one of the more progressive countries in Asia when it comes to crypto regulation. In 2019, MAS issued guidelines on the regulation of digital token offerings, which helped to clarify the regulatory framework for initial coin offerings (ICOs) and security token offerings (STOs). This move helped to encourage the growth of the blockchain and crypto industry in Singapore.
Overall, the collaboration between Singapore regulators and traditional banks is a positive step towards establishing a more secure and trustworthy environment for the use of cryptocurrencies. With the guidelines set to be published in the coming months, it will be interesting to see how they shape the landscape of the crypto industry in Singapore and beyond.
Image source: Shutterstock
