Singapore introduce new guidelines to help banks authenticate customers in cryptocurrency space

According to insiders familiar with the matter, Singaporean banks are teaming up with authorities to establish consistent standards for screening potential customers in the digital assets and cryptocurrency sectors. The project, which has been underway for approximately six months, involves collaboration between the banks, the central bank, and the police. Its aim is to refine the banks’ vetting procedures for opening accounts for firms that offer services related to all types of digital assets.

The initiative will cover stablecoins, non-fungible tokens, as well as transferable gaming or streaming credits. The project is focused on firms providing services in payments, trading, and transfers of these assets. A report outlining best practices in areas like due diligence and risk management may be published in the next two months, according to sources who requested anonymity as the discussions are not public.

Despite these guidelines, the banks will decide whether to accept these clients based on their risk appetites, the sources said. The Monetary Authority of Singapore and police are part of the banks-led working group on the project.

The crypto industry has long struggled to gain access to traditional banks, many of whom remain hesitant due to the volatility of digital assets and potential regulatory scrutiny. The collapse of US lenders Silvergate Capital Corp. and Signature Bank, which provided payment services for crypto firms, has also left clients searching for new banks. This initiative may offer some relief for firms seeking banking services in the cryptocurrency space.