The “Travel Rule” aims to bring reporting standards for virtual asset service providers in line with other traditional financial institutions.
Tether will begin testing Notabene’s cross-border transaction monitoring system for virtual asset service providers (VASP) to combat financial crimes such as money laundering.
Notabene is a new technology for monitoring cryptocurrency transactions in real-time, making the blockchain more transparent and allowing regulators to keep better track of cash flow.
The Know Your Customer infrastructure stack at the firm is built to span jurisdictions with little or no regulation of financial services.
In order to assist cryptocurrency exchanges, digital wallet providers, and financial institutions with the new FATF Travel Rule requirement, #Tether will begin testing the Notabene platform.⬇️https://t.co/9gUpq15As6
— Tether (@Tether_to) October 26, 2021
Notabene claims to offer a low-risk environment to test sophisticated crypto use cases. Tether will use Notabene’s technology to determine whether it can securely transmit identifying data for clients in other VASPs. In particular, as it pertains to transactions conducted by VASPs, Notabene’s solution will help Tether protect its consumers.
The Financial Action Task Force, a worldwide group that sets Anti-Money Laundering standards, has determined that VASPs should adhere to the same rules as regulated financial institutions. The “Travel Rule” advises VASPs to exchange specific client information between counterparties for transactions worth more than a certain amount.
These procedures are meant to assist nations and service providers in preventing money laundering, terrorist financing and complying with sanctions laws. Commenting on the new development, Tether chief compliance officer Leonardo Real stressed the importance of working with other VASPs, stating:
“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.”
According to a recent report from Cointelegraph, the United States Securities and Exchange Commission will be in charge of U.S. stablecoin regulation and enforcement. In 2021, the stablecoin market has seen tremendous development, and Tether’s market capitalization has soared this year, increasing by 229% since the start of the year to $69.6 billion.