Singapore banks form new alliances for vetting crypto clients

• Singapore banks are working with the country’s Central Bank and police to develop a vetting process for crypto clients.
• The collaboration comes amid severe volatility in the crypto market following several scandals and bankruptcies.

Singapore banks have teamed up with the country’s law enforcement and its Central Bank to come up with a uniform set of standards for vetting potential clients associated with digital assets and the crypto sector. The new initiative is reportedly a response to the bankruptcies and scandals witnessed in the crypto industry over the past few months. 

Banks working with the Monetary Authority of Singapore

According to a report by Bloomberg, the collaboration between the Monetary Authority of Singapore (MAS) and the country’s banks has been going on for the past six months. The aim is to develop a sophisticated vetting process for clients related to the digital asset space.

MAS and the country’s police are part of the banks-led working group on the project. However, even with such guidelines, the banks will decide whether to accept these clients based on their risk appetites. 

The Monetary Authority of Singapore said in a statement that,

“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.” 

A detailed report related to this collaboration is expected to be published in the next two months. Moreover, sources revealed that the report will lay out the best practices surrounding the vetting process. This will also include guidance on how to conduct due diligence as well as risk management.

Furthermore, this report will also cover Stablecoin, non-fungible tokens as well as streaming credits. The MAS clarified that there are no rules stopping banks from doing business with firms handling cryptocurrencies or other forms of digital assets.