In the crypto sphere, Singapore has positioned itself as a financial hub to cater to companies looking for greener pastures. This is evidenced by the collaboration between banks and authorities in the city-state to develop uniform standards for screening potential customers from the crypto industry.
This has been ongoing for the past six months with the Monetary Authority of Singapore (MAS) joining the process to help the police and banks set to fine-tune the vetting approach in regard to opening accounts for all types of digital asset services. This collaboration is organized with the express purpose of further developing and publishing a comprehensive report focusing on payment services such as stablecoins, NFTs, and gaming credits. This report will outline best practices in areas such as due diligence and risk management in the coming two months.
Currently, banks have been allowed to make their own decisions in regard to opening accounts for crypto-related customers without being subject to any prohibitions. This was confirmed by the MAS in that they stated that while there are no rules, the banks are still required to conduct customer due diligence measures to understand and mitigate any potential risk.
The banking sector’s involvement with the crypto industry has become the center of attention after two notable collapses; that of Terraform Labs (TFL) and crypto hedge fund Three Arrows Capital (3AC). This caused the authorities in the city-state to increase scrutiny and propose stricter regulations for retail crypto trading.
However, as US authorities clamp down hard on banks and other financial services providers associated with the crypto industry, Singapore could become the jurisdiction that provides the financial assistance that the crypto industry desperately needs.
Nevertheless, with stricter policies likely to be introduced, Singapore should not become the haven for illegal activities that some have been envisioning it to be. It is through collaborations such as the one banks and authorities are working on that Singapore can further establish itself as a legitimate place to do business in the digital asset space and contribute to a safer and more regulated environment.
