Singapore authorities have revealed their intentions to investigate service providers from the digital asset sector looking to open a bank account. Specifically, Bloomberg reported that banks in Singapore are working with local authorities to create a set of uniform standards to screen potential customers from the crypto and digital assets sectors.

The move comes in the context of volatility and recent industry collapses such as FTX and Terraform Labs. Moreover, local authorities also took note of the collapses of US lenders Silvergate and Signature Bank that forced clients to look for new banks. Representatives from the Monetary Authority of Singapore (MAS) cited by Bloomberg highlighted that there are no rules preventing banks operating in the country from doing business with firms handling cryptocurrencies or other forms of digital assets.

However, they emphasised that banks are required to employ customer due diligence measures to properly assess any potential risks. Lenders are working closely with the central bank and police to fine-tune their vetting approach when opening accounts for service providers in all types of digital assets. The project has been ongoing for about six months at the time of writing.

The result of this collaborative effort will take on the form of a report that will detail best practices in areas such as due diligence and risk management. Bloomberg’s sources revealed that this report will likely be published in the next two months. The initiative will also look into stablecoins, non-fungible tokens, and transferable gaming or streaming credits.

Even with the guidelines in place, it will be up to banks to decide whether to accept these clients or to pass on the opportunity of doing business with them. The strictness of crypto regulation in Singapore In August 2022, the Monetary Authority of Singapore revealed its plans to roll out new regulations that will make it more difficult for retail investors to trade cryptocurrencies. The plans took form as MAS specialists assessed retail investors as being ‘irrationally oblivious’ about the risks related to the crypto trade.

According to Reuters, Ravi Menon, managing director of the MAS, said at an event on 29 August 2022 that despite warnings and measures, surveys show that consumers are increasingly trading in cryptocurrencies globally, not just in Singapore, attracted by the prospect of sharp price increases. The MAS official reportedly continued to explain that additional risks associated with crypto trade may include ‘customer suitability tests and restricting the use of leverage and credit facilities for cryptocurrency trading. ’ .