MAS and Banks Collaborate on Crypto Standards in Singapore

It has been reported that the potential guidelines will not be binding for banks, as they are able to rely on their own risk assessments.

Singaporean regulators have been collaborating with traditional banks for the past six months to establish uniform standards for screening potential customers from the crypto industry. The goal of this partnership is to optimize the procedures for opening accounts of digital asset service providers and enhance risk management and due diligence.

According to a recent Bloomberg report, the Monetary Authority of Singapore (MAS) has been collaborating with the police forces to equip local banks with the necessary tools to screen potential customers from the crypto industry. The results of this collaboration will be published in the next two months and will cover topics such as stablecoins, non-fungible tokens (NFTs), and transferable gaming or streaming credits.

However, the guidelines provided by MAS will not be binding for banks, as they will still have the right to make decisions based on their own risk assessments. There are currently no regulations in place that prohibit banks from working with digital asset providers, and the decision to engage in a banking relationship with a customer is left up to the discretion of the banks, who must weigh commercial considerations against business risk tolerance.

This partnership between regulators and traditional banks is a significant step towards creating a more secure and regulated environment for the crypto industry in Singapore. It reflects the country's commitment to fostering innovation while ensuring that risks are managed effectively.

Singapore has become a popular destination for crypto businesses due to its flexible tax policies, access to diverse tech talent, and convenient location within the Asian time zone. However, in late 2022, the MAS proposed a ban on digital payment token service providers offering any credit facility to consumers, including fiat and cryptocurrencies. This proposal was met with opposition from local crypto lobbyists.

Currently, local authorities are investigating the failed Terraform Labs and its co-founder Do Kwon, whose collapse resulted in a significant downturn in the digital asset market with losses totaling nearly $40 billion.

In summary, Singaporean regulators have been collaborating with traditional banks to establish uniform standards for screening potential customers from the crypto industry. While the guidelines provided by MAS are not binding, this partnership reflects the country's commitment to creating a secure and regulated environment for the crypto industry. 

Singapore's popularity as a destination for crypto businesses is driven by its flexible tax policies and access to diverse tech talent. However, recent proposals for banning credit facilities by digital payment token service providers have faced opposition from local crypto lobbyists, and authorities are currently investigating the collapse of Terraform Labs.

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