Singapore’s central bank and law enforcement agencies collaborate with financial institutions to enhance and standardize the vetting process for opening cryptocurrency accounts with Singapore’s banks power.
This proactive move is in response to the recent collapse of three US-based banks, Silvergate Capital, Signature Bank, and Silicon Valley Bank, primarily catering to cryptocurrency firms. With regulators worldwide becoming increasingly cautious of the crypto industry, Singapore aims to establish robust measures to protect its financial ecosystem from similar setbacks.
Sources knowledgeable about the situation have revealed that a separate industry report detailing best practices in risk management and due diligence is expected to be published within the next two months.
This report will focus on companies providing payment services, including those with stablecoins, non-fungible tokens (NFTs), and gaming credits. The initiative, which emphasizes the importance of banks’ power in maintaining financial stability, is set to strengthen the sector’s regulatory framework.
A spokesperson for the Monetary Authority of Singapore (MAS) clarified that no rules prevent banks from doing business with cryptocurrency and digital payment token (DPT) players in the country. However, they emphasized the need for banks to conduct customer due diligence measures to understand and manage the risks posed by these clients.
By taking a proactive approach, Singapore is positioning itself as a forward-thinking financial hub that acknowledges the potential of cryptocurrency while ensuring that its banks’ power is harnessed to maintain a secure and stable economic environment.
The forthcoming industry report and the collaborative efforts between the central bank, police authorities, and financial institutions are crucial steps toward safeguarding Singapore’s financial sector against the risks associated with the rapidly evolving digital economy.