Guaranteed Travel Rule Compliance: TRUST and TRP Compared
In a nutshell, TRUST (Travel Rule Universal Solution Technology) and TRP (Travel Rule Protocol) have the same goal: ensuring Travel Rule compliance by facilitating VASPs in the exchange of Travel Rule information.
Interestingly, they have a lot in common; below, we discuss how TRUST and TRP ensure Travel Rule compliance, as well as their similarities and minor differences.
TRUST and TRP Guarantee FATF Travel Rule Compliance
TRUST and TRP Rely on Peer-to-peer Data Exchange Models
The FATF Travel Rule emphasises the protection of sensitive customer information from unauthorised access.
TRUST and TRP rely on a peer-to-peer data exchange when sharing originator and beneficiary information, meaning data is only shared with the VASPs involved in the transaction. Additionally, neither uses a centralised database to store sensitive customer information, resulting in decreased chances of data breaches or leaks.
TRUST uses a decentralised, peer-to-peer model for data sharing. It encrypts all Travel Rule information and sends it directly between VASPs through secure channels. Functioning solely as the messaging layer in the data exchange, TRUST employs a secure lookup process to identify counterparties.
TRP is also fully decentralised and peer-to-peer, but it’s a technical standard rather than a network. It’s designed so that any compliant VASP that has integrated its code can exchange Travel Rule data with its previously vetted counterparty.
Read: TRUST: A Closer Look at the Universal Travel Rule Network
TRUST and TRP Encourage VASP Interoperability
The FATF’s Targeted Update recommends that Travel Rule tools be interoperable to ensure global Travel Rule compliance.
Both TRUST and TRP aim to be interoperable and connect compliant VASPs globally.
Regarding TRUST, VASPs need to be part of the TRUST network to send Travel Rule data to their counterparties. If part of the TRUST network, VASPs need to integrate TRUST into their Travel Rule solution.
TRP allows VASPs to connect across different Travel Rule solutions, provided they have implemented the protocol.
Irrespective of a VASP’s selected approach, implementing TRUST and TRP is neither time-consuming nor difficult for tech teams; users have been pleasantly surprised by the installations’ ease in both instances.
Learn More about TRUST
TRUST and TRP Aid Counterparty Discovery and Verification
VASPs must identify their counterparty before exchanging Travel Rule information; TRUST and TRP facilitate this.
Before exchanging Travel Rule information, TRUST verifies cryptographically that the recipient VASP controls the destination address, ensuring sensitive Travel Rule details are sent securely to the correct counterparty.
On the other hand, TRP relies on VASP auto-discovery to identify counterparties via its Travel Address. The Travel Address replaces a standard wallet address in digital asset transactions. It is unique because it contains information on the VASP that controls the receiving address and the URL to receive the Travel Rule data, successfully identifying the counterparty.
Read: TRP: Solving Key Travel Rule Compliance Issues
Global Travel Rule Support with TRUST and TRP
The FATF recommended that solutions must meet varying Travel Rule requirements across different jurisdictions, and with TRUST and TRP, this is possible.
Neither TRUST nor TRP is bound to a single jurisdiction. By accommodating cross-border transactions and varying jurisdictional requirements, both options assist VASPs worldwide in ensuring Travel Rule-compliant transactions.
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TRUST and TRP Support All Digital Assets
When implemented, the Travel Rule applies to every digital asset. This is another box that both TRUST and TRP tick. Due to their broad support, both options can meet Travel Rule requirements in various jurisdictions, irrespective of threshold and transaction value.
As TRUST is blockchain-agnostic, it supports any blockchain or digital asset a VASP may offer, enabling coverage of an entire digital asset portfolio.
Conversely, TRP was the first Travel Rule protocol to adopt the DTIF-managed ISO 24165; as a result, the protocol supports over 2800 digital assets, with this number ever-increasing.
Read: TRP: Solving Key Travel Rule Compliance Issues
Parting Thoughts
TRUST and TRP stand out as robust and secure options for VASPs serious about Travel Rule compliance. Both offer peer-to-peer data exchanges, straightforward implementation, strong counterparty verification methods, global support and interoperability, with support for all digital assets.
The good news for VASPs deciding on an approach is that TRUST and TRP are compatible and can operate side-by-side, allowing VASPs to benefit from both options’ strengths.
Are you ready to find out more about TRUST and TRP?
