Singapore is working on new industry standards for banks that seek to onboard new digital asset clients. A new report reveals that the country’s central bank has teamed up with law enforcement authorities and commercial banks to develop the new standards.
Digital asset businesses have struggled to access banking services worldwide for years, and Singaporean VASPs have not fared much better. While it’s not illegal to offer services to the industry, banks have refrained from working with VASPs, citing fear of regulatory crackdown and money laundering concerns.
This could soon change, Bloomberg reports. Citing unnamed sources who have been privy to the discussions, the outlet revealed that the Monetary Authority of Singapore (MAS) has been working with commercial banks and the police on the new standards.
The initiative has been ongoing for six months and focuses on fine-tuning the banks’ approach when vetting VASPs who apply for accounts. The participants are set to publish a report on their findings and recommendations within the next two months.
Bloomberg further revealed that the initiative focuses on VASPs providing services in trading, payments, and transfers of digital assets. It will also cover stablecoins, NFTs, and gaming or streaming credits.
Even with such a standard in place, commercial banks could still deny services to individual VASP clients. Their decisions will be solely based on their risk appetite, the sources said.
MAS, the country’s central bank, declined to comment on the project’s specifics. However, it pointed out that it has not prohibited banks from servicing VASPs. It’s entirely up to the bank to decide whether it will offer services to a specific VASP.
“As with any other current or prospective customer, banks are required to conduct customer due diligence measures to understand and manage the risk(s) posed by them. Banks make their own determination of whether to start or continue a banking relationship with a customer, balancing between commercial considerations and business risk tolerance,” a spokesperson for the regulator said.
While banks continue to deny VASPs services, Singapore’s largest bank, DBS, has invested heavily in its digital asset business. The bank is unmoved by last year’s industry turmoil, with CEO Piyush Gupta saying that the shakeup only increased the bank’s resolve. DBS intends to offer its digital asset services to 300,000 wealthy clients in Asia.
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