Tether – the world’s biggest stablecoin has made the bold decision to implement new compliance tools designed to enforce so-called crypto travel rules.
Notabene’s end-to-end protocol-agnostic solution will monitor VASP-to-VASP transactions as part of a renewed emphasis on tackling crypto money laundering and cross-border crime. It will also open up a test environment for Tether.
The move comes as the Financial Action Task Force (FATF) – an international money laundering watchdog – issued warnings that Virtual Asset Service Providers (VASPs) will be held to the same standard as normalised regulated financial institutions.
The travel rule could see VASPS transmit specific customer data between counterparties in VASP-to-VASP transactions that exceed a certain threshold – the information would all be relevant to combat money laundering, terror and drug financing, and enforcement of international sanctions such as in the instance of Iran Bitcoin mining to get around oil sanctions.
Tether executive explains travel rule move
In comments shared with Coin Rivet, Leonardo Real – Tether’s CCO, explained how the move aimed to deliver institutional-level transparency and foster cooperation between regulators, traditional finance, and digital finance.
“It’s important that we work with other large VASPS to build this industry from the ground up,” said the Tether CCO.
“As pioneers of blockchain technology and leaders in transparency, we are dedicated to not only keeping up with new rules but helping shape them.
“Because the Travel Rule traditionally applies to financial institutions, we see this as an opportune moment to foster cooperation across traditional and digital channels in order to create better services for customers globally. We are proud to lead the charge on behalf of all stablecoins in order to make a positive change towards protecting our clients.”
The testing will lead to a full-scale trust data layer integration to USDt blockchain transactions utilising Notabene’s solution.
Notabene CEO Pelle Braendgaard was excited at the prospect of formalising regulations compliance in the emergent crypto space.
“Tether’s stablecoin has rightfully cemented its role as a core part of the global crypto industry,” said Braendgaard.
“Notabene is excited to help Tether bring out FATF crypto Travel Rule compliance across its global network, leading to a safer and more regulatory compliant crypto world.”
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.