Travel Rule Protocol (TRP) Version 2.0 Published
Key Takeaways on TRP 2.0:
● Introduces a solution to the “discoverability” problem based on the LNURL standard known from Bitcoin’s Lightning Network
● Provides a simple way for virtual asset service providers (VASPs) to comply with FATF recommendations without putting additional burden on end-users
As a key contributor to the Travel Rule Protocol, we're happy to see the release of TRP 2.0. While version 1 of TRP was already fully compliant with the Financial Action Task Force (FATF) Travel Rule recommendation, it had some known shortcomings regarding end-user experience. We addressed those in version 2.0, building on existing open source standards.
The 21 Analytics product will have built-in support for TRP 2.0 with our upcoming June release.
What is the Travel Rule Protocol (TRP)?
TRP is a minimal, pragmatic standard for compliance with FATF Travel Rule Recommendations for virtual assets. With a clear focus on the FATF recommendations and limiting the scope, the protocol builds on existing technology such as the interVASP messaging standard*, LNURL, and direct VASP-to-VASP communication using HTTP.
How does the Travel Rule Protocol work?
Andrew Davidson, the TRP Working Group Chair, says:
It was important to the TRP Working Group that the end user experience was as easy as possible, and no more difficult than typical existing pre-Travel Rule industry practises.
With the LNURL-based workflow, we have allowed end users to have an almost identical user experience to that they are used to with existing Virtual Asset platforms, while at the same time being compliant with the FATF recommendations and bypassing the complexity of the VASP discoverability.
Harm Aarts, 21 Analytics’ senior software engineer and the leading contributor to TRP, further explains the easy-to-use workflow:
The experience is very familiar for the end-user. Instead of copying the blockchain address between VASPs deposit and withdrawal screens, or scanning address QR codes, they just copy and paste the encoded TRP 2.0.0 LNURL or scan the TRP 2.0 LNURL QR code.
How does TRP Version 2.0 differ from TRP Version 1.0?
Leveraging LNURL in TRP 2.0, it is possible to identify which VASP owns a specific virtual asset address. This allows VASPs to exchange Travel Rule information faster and more accurately while greatly improving the end-user experience. The transfer of personal data is done solely by the VASPs and doesn't require any additional input from the user.
* interVASP messaging standard is a consolidated data model for transmitting required originator and beneficiary information, built by a group of collaborative, relevant associations in the crypto and finance industry. Learn more here.