The Monetary Authority of Singapore (MAS) and law enforcement agencies are collaborating with local banks to create standardized rules for assessing prospective clients in the crypto industry. The project has been running for about six months and will encompass all forms of digital assets, including stablecoins, NFTs, and transferrable gaming or streaming credits.
The initiative aims to fine-tune banks’ verification procedures when creating accounts for service providers. The banks will determine whether to accept customers depending on their risk tolerance, even with such criteria in place. The MAS has stated that there are no restrictions prohibiting Singapore banks from doing business with enterprises dealing with cryptocurrencies or other types of digital assets.
Despite the lack of restrictions, Singapore has witnessed controversies involving Singapore-based companies such as Terraform Labs and Three Arrows Capital. With US authorities cracking down on banks that handle cryptocurrency users, crypto firms are scurrying to locate financial partners and countries to do business in.
Singapore has developed a licensing structure for the sector and recommended further restrictions on retail crypto trading. An industry report covering best practices in areas like due diligence and risk management may be issued in the next two months, according to sources familiar with the matter.
Overall, the collaboration between the MAS, law enforcement agencies, and local banks aims to establish a regulatory framework for the crypto industry, providing greater transparency and security for customers and banks alike.
