Singapore Banks to Vet Crypto Clients: New Guidance Issued

Von | 10. April 2023

• Singapore authorities are working with banks on new guidance for vetting crypto clients.
• The guidance will cover stablecoins, nonfungible tokens (NFTs) and firms providing services in payments, trading and transfers of these assets.
• Banks will decide whether they want to take on crypto clients based on their risk appetite.

Singapore Working On New Guidance For Crypto Clients

Singapore authorities are currently working with banks and other lenders to set uniform standards for vetting cryptocurrency clients, sources close to the matter told Bloomberg. According to the report, the central bank and police have been helping banks to work on their vetting process when opening accounts for service providers in the cryptocurrency and digital asset space.

Focus Of The Initiative

The initiative is set to cover stablecoin and NFTs as well as transferable gaming or streaming credits. The initiative is set to focus on firms that provide services in payments, trading and transfers of these assets. Banks would have the final say in deciding whether to accept cryptocurrency clients based on their risk appetite, the sources added.

Tighter Regulation Following Turmoil

The guideline to be issued by Singaporean authorities could be considered a way of tightening regulation in the crypto space following recent high-class collapses last year which resulted in billions of dollars lost by numerous crypto companies including FTX & Terraform Labs. Additionally, Silvergate Bank, Signature Bank & Silicon Valley Bank (SVB) all recently collapsed resulting in some crypto clients scrambling for new banks.

Governmental Stance On Crypto Companies

At present, the Singaporean government doesn’t stop banks operating within its jurisdiction from doing business with crypto companies. While talking about this issue recently at a conference held virtually by Fintech Association of Hong Kong, Ravi Menon – Managing Director at Monetary Authority of Singapore – noted that „we don’t tell our financial institutions not do business with any particular class of customers.“

Final Decision Lies With Banks

The final decision regarding whether or not a bank should accept cryptocurrency businesses lies solely with each bank’s own risk appetite evaluation criteria & internal policies concerning such activities according to Ravi Menon who further stated that „banks must assess risks associated with dealing with these customers relative [to] other customer segments“.