TL;DR Breakdown
- Notabene “Travel Rule” aims to align reporting requirements for virtual asset service providers
- Tether will begin testing Notabene’s cross-border transaction monitoring system
The “Travel Rule” aims to align reporting requirements for virtual asset service providers with those of other traditional financial institutions.
On Tuesday, Tether Operations Limited, the business behind Tether (USDT), announced that it will use Notabene, a full solution for cryptocurrency Travel Rule compliance.
Tether to test Travel Rule for cross-border transactions
Tether will begin testing Notabene’s cross-border transaction monitoring system for virtual asset service providers (VASP) to combat financial crimes like money laundering.
Notabene is a cutting-edge technology that allows regulators to keep better track of money flow by monitoring cryptocurrency transactions in real-time.
The Know Your Customer infrastructure stack at the firm is designed to work in environments with little or no financial services regulation.
Low-risk setting
Notabene claims to provide a low-risk setting for testing complicated cryptocurrency applications. Tether will utilize Notabene’s technology to see if it can securely transmit client information across VASPs.
Notabene’s technology, in particular, will assist Tether to safeguard its customers by allowing VASPs to conduct transactions more safely.
The Financial Action Task Force, an international organization that establishes Anti-Money Laundering guidelines, has decided that VASPs should adhere to the same rules as regulated financial institutions. The “Travel Rule” advises VASPs to share certain client information between counterparties for transactions exceeding a pre-determined amount.
Procedures such as these are designed to assist nations and service providers to tackle money laundering, terrorist financing, and conforming with sanctions regulations. Tether’s chief compliance officer Leonardo Real noted the significance of collaborating with other VASPs.
The United States Securities and Exchange Commission will be in charge of stablecoin regulation and enforcement in the United States. The stablecoin market has grown tremendously in 2021, with Tether’s market capitalization growing by 229% this year to $69.6 billion.
