Virtual asset service providers, known as VASPs, just launched a new initiative called OpenVASP – something that aims to solve one of the biggest regulatory challenges often known as the “travel rule.”
For those of you who don’t know, this rule basically necessitates that VASPs share customer information with each other so that one crypto exchange can confirm – for instance – that a customer on another exchange is sending 10 Bitcoins (BTC) and has a verified identity.
The cryptocurrency exchanges will benefit big time from OpenVASP as reports show. The initiative was first unveiled at the Blockshow Asia conference in Singapore and the key players behind it include the Swiss-based Crypto Valley Association (CVA), International Digital Asset Exchange Association (IDAXA), ACCESS Singapore Cryptocurrency and Blockchain Industry Association.
They announced OpenVASP at the event and said that they are working with other key partners on making this the future of sharing information, the cryptocurrency news show.
“The initiative will enable VASPs to transmit blockchain transaction information privately, immediately and securely, in compliance with the Financial Action Task Force (FATF) Recommendation 16, also known as the travel rule,” according to one press release.
A specific whitepaper was prepared too, proposing an OpenVASP protocol “based on key design principles of decentralization, privacy, broad applicability, while remaining agnostic to the virtual asset being transferred.”
As shown, the protocol would allow VASPs from across different jurisdictions to transact between themselves without knowing each other and without the need to register with a cental authority or a database, as per the announcement.
“OpenVASP is a roadmap to FATF compliance that enables VASPs to protect private and business-sensitive data. We hope the community will consider it as a blueprint. Building partners are welcomed,” said Chris Gschwend who is the head of CVA’s VASP/AML Taskforce.
This travel rule is “almost like applying U.S. postal mail rules to email for U.S. communication roles. Like pushing a square peg into a round hole for us, the blockchain ecosystem,” according to Tim Byun who is a former regulator and now CEO of the OKCoin cryptocurrency exchange.
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