Tethers are being tested as a way to comply with the FATF’s travel rule
Tether, the firm behind one of the most popular stablecoins in the crypto market, has stated that it would begin testing a system that will allow it to comply with the Financial Action Task Force (FATF) travel regulation. Tether will be able to seamlessly exchange trip rule data across Virtual Asset Service Providers using the system supplied by Notabene, a firm that provides ID and travels rule compliance solutions (VASPs)
Compliance Solution with Tether Eyes
Tether, the business behind the most valuable stable coin in the cryptocurrency market, USDT, will trial a solution that will allow it to comply with the Financial Action Task Force’s proposed travel regulation. This information will be communicated between VASPs using the solution that will be evaluated, offered by Notabene, a software business that provides compliance solutions.
Tether’s efforts are aimed at preventing bad actors from utilizing USDT to transport funds from or to unlawful sources. This approach intends to make tether (USDT) more friendly to law enforcement agencies all across the world, as well as safer for users that utilize Tether’s stable coin in transactions.
Tether’s CCO, Leonardo Real, stated :
It’s critical that we collaborate with other significant VASPs to start from the ground up and establish this sector. We are committed to not just following but also shaping new rules as pioneers of blockchain technology and leaders in transparency.
FATF’s Travel Rule
The FATF’s travel rule, which was proposed to be implemented by VASPs in the same way that it is now enforced for traditional financial institutions, states that the information of both parties involved in a transaction must be shared by the institutions facilitating it in order to assist in the prevention of money laundering and terrorist financing. However, because of the pseudonymous nature of bitcoin transactions, implementing this regulation has proven challenging.
Tether intends to incorporate Notabene’s technology after successfully testing it in order to have better monitoring over USDT transactions. Tether’s transparency page indicates that there are about 70,687,988,377 tethers in circulation at the time of writing.