Cryptocurrency and digital asset companies can expect greater scrutiny from banks in Singapore.
Banks, the central bank and police in the city-state are working together to develop standards for vetting potential customers from these sectors, Bloomberg reported Thursday (April 6), citing unnamed sources.
The project has been underway for six months and a report outlining best practices is expected to be released within two months, the report said.
The proposed standards will cover the firms associated with crypto, stablecoins, non-fungible tokens (NFTs), transferable gaming or streaming credits, and the payments, trading and transfers associated with these assets, per the report.
The development of these standards comes at a time when crypto firms are finding it more difficult than ever to access traditional banks because fallout around the failures of crypto-related firms, regulatory pressures and the collapse of crypto client-friendly Silvergate Capital and Signature Bank, according to the report.
Singapore has also been looking at other aspects of the crypto industry.
In August 2022, the head of the city-state’s central bank said the organization was weighing new measures to restrict and discourage speculation in trading crypto.
“Many consumers are still enticed by the prospect of sharp price increases in cryptocurrencies,” Ravi Menon, managing director of the Monetary Authority of Singapore (MAS), said Aug. 29. “They seem to be irrationally oblivious about the risks of cryptocurrency trading.”
Menon said at the time that MAS is going to continue to promote Singapore as a FinTech hub and attract leading crypto players to Singapore but will keep its “stringent and lengthy licensing process” in place.
As PYMNTS reported in August, the MAS currently regulates stablecoins under the Payments Services Act (PSA), which primarily deals with anti-money laundering (AML) and countering the finance of terrorism (CFT) controls.
PYMNTS research has found that Singapore is both the most digitally connected country in the world and a leading innovator in facilitating international business payments.
The report “How the World Does Digital: Different Paths to Digital Transformation” found that Singapore is the most engaged nation in the ConnectedEconomy™ by all the study’s metrics.
In addition, the city-state’s tech sector is heavily focusing on cross-border payments innovation, both singly and in partnerships, the report said.