Table of Contents
- Banks Will Ultimately Decide Whether to Take on Crypto Clients
- Hong Kong Positions Itself as the Digital Asset Hub
Singapore regulators are reportedly working alongside police forces to develop uniform guidelines for banks to aid in screening potential crypto clients.
According to reports from Bloomberg, the Monetary Authority of Singapore (MAS) is working with local police forces to develop new guidelines to help banks optimize procedures for vetting potential crypto clients who want to open accounts. Citing persons familiar with the matter, the central bank, alongside police, has been working with lenders in the city-state over the past six months to establish uniform standards to screen clients.
An industry report outlining best practices for due diligence and risk management will be released in the next two months. Bloomberg further indicates the potential guidelines will deal with topics such as stablecoins, non-fungible tokens (NFTs) and transferable gaming or streaming credits, focusing on firms providing payment, trading, and transfer services of digital assets.
Banks Will Ultimately Decide Whether to Take on Crypto Clients
The report states that despite these guidelines, banks can still decide whether to accept clients based on their risk appetites.
In response to an inquiry by Bloomberg, the MAS said Singapore does not prohibit banks operating in the country from dealing with digital asset-related firms.
As with any other current or prospective customer, banks are required to conduct customer due diligence measures to understand and manage the risk(s) posed by them. Banks make their own determination of whether to start or continue a banking relationship with a customer, balancing between commercial considerations and business risk tolerance.
Securing banking services has long been difficult for any entity or person dealing with digital assets, given lenders’ concerns about the illicit flow of money and other criminal activities.
Once a hub for digital asset firms, Singapore became increasingly weary of dealing with crypto firms after Three Arrows Capital and the Terra Luna ecosystem collapsed.
The Singapore central bank said last year that it had been taking additional measures relating to crypto firms as it prepared for impending regulatory change. Amid an ongoing liquidity crisis, the MAS sent out detailed questionnaires to applicants and holders of its Digital Payment Token license last year. The questionnaire sought “highly granular information” about crypto companies’ business activities and holdings.
Hong Kong Positions Itself as the Digital Asset Hub
Hong Kong stepped in to fill the void as Singapore introduced stricter crypto regulations. In October, the Hong Kong government announced that it would introduce regulation to become the next go-to digital asset hub.
After introducing an open regulatory framework related to digital assets, Hong Kong caught the interest of over 80 crypto firms, which have expressed their interest in establishing offices in the city and obtaining local licenses.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.