protocols

Travel Rule Messaging Protocols

The FATF’s Recommendation 16 on Wire Transfers, “Travel Rule,” requires virtual asset service providers (VASPs), financial institutions, and obliged entities to exchange originator and beneficiary identifying information with counterparties during crypto transfers above $1,000.* 

Before this recommendation, and due to the public nature of blockchain transactions, no messaging protocols to send and receive customer personally identifiable information (PII) existed. Various companies and industry working groups created several Travel Rule messaging protocols to address a large (but not the only) component of travel rule compliance: safely and securely transferring customer PII alongside blockchain transactions.
*Note that different jurisdictions have different transaction threshold amounts.

This article will assess:

What is a Travel Rule Messaging Protocol?

A Travel Rule messaging protocol allows VASPs to exchange originator and beneficiary information securely. As a comparison, the two most widely used internet standard communication protocols for email transmission are SMTP (Simple Mail Transfer Protocol) and Internet Message Access Protocol (IMAP). Mail servers and other message transfer agents use SMTP and IMAP to send and receive mail messages. To comply with FATF’s Travel Rule Recommendation, VASPs need a similar messaging protocol to exchange originator and beneficiary information.

Why are there multiple Travel Rule messaging protocols? 

Due to the public nature of blockchain transactions, no messaging protocols for sharing of PII existed before the FATF recommendation. Various working groups and private companies took on the task of building viable initiatives to solve the technical aspect of the travel rule. While it is great that there are multiple protocols that are coming live, VASPs often are not sure which to support. We believe that with time protocols may merge or some may stop being in use. Until then, we choose to take an agnostic approach and support all major protocols, so that our customers are not faced with the difficult decision of picking one protocol over another. 


For example, there were many electronic mailing messaging protocols before SMTP and IMAP became the standard. During that time, if you wanted to send an email to someone in another system, you needed a gateway. Years later, SMTP and IMAP became the standard due to their simplicity.  

CONCEPT COMPARISON:
Gmail abstracts the complexity to send emails around the world as Notabene abstracts complexity to send Travel Rule data around the world.
CONCEPT COMPARISON: Gmail abstracts the complexity to send emails around the world as Notabene abstracts complexity to send Travel Rule data around the world.


What should a complete Crypto Travel Rule solution entail?

A complete FATF’s Crypto Travel Rule solution allows crypto businesses and financial institutions to:

  1. Determine counterparty type of a transaction,
  2. Apply appropriate jurisdictional requirements,
  3. Run sanctions-screening on each counterparty,
  4. Rely on blockchain analytics providers as a source to identify counterparty VASPs and assess risk score of an address
  5. Perform diligence on VASPs before allowing transactions with them
  6. Store customer and beneficiary personally identifiable information (PII) in a GDPR-compliant manner and for record-keeping / reporting purposes, and
  7. Send and receive customer PII to and from VASP using a wide variety of blockchain messaging protocols.

A Travel Rule messaging protocol addresses only one of the seven components to full compliance. Messaging protocols still need to be integrated into a complete Travel Rule solution.

Which FATF R.16 Crypto Travel Rule messaging protocols are currently on the market?

Since FATF launched its requirements, the crypto industry has already started several initiatives to solve the technical aspect of the travel rule. These consist of protocols built by industry alliance networks, closed groups of exchanges, and private companies as commercial offerings. While addressing the same challenge, the messaging protocols differ in terms of implementation requirements, how they solve discovery, governance models and costs of becoming members.

Industry Alliance Networks
Closed Networks
Commercial Solutions

What should be considered when choosing a Travel Rule messaging protocol provider? 

Messaging protocol vs. fully-integrated software providers

Integration effort

Interoperability with various protocols 

Governance model

Non-custodial wallet support

Launch date

Industry support

Membership/usage fee

Does Notabene compete with Travel Rule messaging protocols?

Notabene does not compete with TRP, OpenVASP, USTRWG, Sygna Bridge, TRISA, Shyft, Netki, or VerifyVASP. However, we integrate them into our end-to-end Travel Rule solution. Notabene customers can choose the best fit protocols for their resources and technology needs. We assist them in onboarding into the protocol, where applicable, and managing the relationship with the protocols of their choice.

From there, we provide a multi-protocol switch that abstracts the protocol layer from everyday use. Notabene clients can send and receive Travel Rule compliant customer data to and from any VASP, protocol-agnostically.


Which Travel Rule messaging protocols does Notabene support?

Notabene provides a SWIFT-like trust and messaging layer on top of crypto transactions, enabling companies to collaborate and identify each others’ customers. We are committed to supporting the most widely used industry initiatives, including TRP, OpenVASP, USTRWG, Sygna, TRISA, Shyft, Netki, and VerifyVASP.

We provide an easy-to-use turn-key SaaS solution for Travel Rule support, allowing virtual asset service providers to comply with local and global AML regulations while maintaining their transaction flow. We additionally support companies in onboarding to their travel rule messaging protocol of choice.

The rest of the tools in our suite allow companies to:

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