Tether, the operator of one of the leading stablecoins in the cryptocurrency market, has announced that it will begin trials of a system that will allow the company to comply with the Travel Financial Action Team (FATF) rule. The system, provided by Notabene, a company that provides identity and travel rules compliance solutions, will allow Tether to automatically communicate travel rules data between Virtual Asset Service Providers (VASPs).
Compliance solution for rope eyes
Tether, the company behind the issuance of the largest stablecoin by market capitalization in the cryptocurrency market, USDT, will test an experimental solution that will allow it to comply with the travel rule proposed by the Financial Action Task Force. The solution to be tested, provided by Notabene, a software company that provides compliance solutions, will allow this information to be transferred between VASPs.
Tether’s actions are directed at thwarting bad actors who use USDT to move funds coming from illegal sources or go to illegal sources. This solution aims to make Tether (USDT) more convenient for law enforcement agencies around the world, and more secure for users transacting with the Tether stablecoin.
Leonardo Real. CCO of Tether announced:
It is important that we work with other large VASP companies to build this industry from the ground up. As pioneers in blockchain technology and pioneers in transparency, we are committed to not only keeping pace with new rules but helping shape them.
FATF travel rule
The FATF Travel Rule, which has been proposed to be implemented by VASPs as now applied to traditional financial institutions, states that information about the parties conducting a transaction must be shared by the institutions facilitating it to assist in the event of money laundering or terrorist financing. activities. However, implementing this rule in the cryptocurrency world has been difficult, due to the borrowed nature of transactions.
This is why crypto travel rule compliance methods sometimes use blockchain analytics and other systems to successfully present this data. Tether is not the only company seeking to raise the level of vigilance about transactions made using its products. In July, Binance also implemented a similar system, introduced by blockchain intelligence firm Ciphertrace, to comply with travel rules requirements, being one of the first exchanges to do so.
After successfully testing the Notabene system, Tether aims to integrate this solution to gain better oversight of transactions involving USDT. At the time of writing, Tether’s transparency page indicates that there are approximately 70,687,988,377 strands in circulation today.
What do you think of Tether testing for a travel compliance solution? Tell us in the comments section below.
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