The Monetary Authority of Singapore (MAS) and the local police are collaborating to provide guidance to traditional financial institutions on how to improve the process of screening potential crypto clients. According to Bloomberg, this initiative aims to help banks fine-tune their screening methods when opening accounts for customers in the crypto industry.
Establishing Guidelines for Accessing Potential Crypto Clients
The MAS and the police have been working on this project for the last six months. They aim to help banks enhance their screening methods, particularly for cryptocurrency companies that offer payment services, crypto trading, and transfers. Additionally, the guidelines will cover stablecoins, non-fungible tokens (NFTs), and transferable gaming or streaming credits.
In two months’ time, the MAS and police are expected to release information on the best practices related to due diligence and risk management. These guidelines will help traditional financial institutions in Singapore to access and vet potential crypto clients more effectively.
Addressing Concerns About the Crypto Industry
The collapse of three banks in the United States – Silvergate Capital, Signature Bank, and Silicon Valley Bank – that catered to crypto firms has raised concerns about the crypto industry. As a result, regulators have become more cautious about the industry, and there have been talks of implementing stricter regulatory policies.
To avoid future crises, the US government is looking to strengthen banking regulations. Similarly, in the United Kingdom, crypto companies are struggling to access banking services. Singapore’s initiative aims to provide clear guidelines for vetting crypto clients and avoid potential risks.
As the cryptocurrency industry continues to grow, traditional financial institutions need to develop new screening methods to evaluate potential crypto clients. Singapore’s initiative is a step in the right direction, as it provides guidelines that can help banks fine-tune their screening methods when dealing with cryptocurrency companies. By improving their screening processes, banks can effectively manage the risks associated with the crypto industry and safeguard their customers’ assets.
