What Does It Mean to Be Future-proof?
To be future-proof, existing technology needs to go beyond what is currently established and envision what the future will behold and include this future in the existing plan. All possible scenarios and exceptions must be taken into account to be future-proof.
For virtual asset service providers (VASPs), choosing a future-proof Travel Rule solution is deciding what is unlikely to become obsolete in the near future. However, this is no easy feat as the market is not currently set. The Financial Action Task Force’s (FATF’s) Recommendation 16 (Travel Rule) has been around for 3 years, and in this time, we have seen rapid changes in the ecosystem, both on the regulatory and technical sides.
Why Protocols Matter
When a jurisdiction applies the FATF’s Travel Rule, VASPs are mandated to collect and exchange identifying information on the originator and beneficiary when conducting virtual asset transactions with another VASP or an obliged entity. Protocols are agreed technical standards and manners that allow information to flow between parties. Hence, Travel Rule protocols enable the communication of sensitive Travel Rule data between businesses. Therefore, to ensure successful communication, both VASPs involved in a crypto transaction must share the same Travel Rule protocol. Multiprotocol software supports more than one protocol resulting in greater interoperability with other VASPs.
How to Be Future Proof: Tying It All Together with 21 Travel Rule
The Travel Rule ecosystem is still developing, so the protocols and solutions are being initiated or evolving. Being future-proof allows VASPs to guarantee interoperability and compliance in uncertain times like now, where regulations and solutions are in ongoing development.
Various multiprotocol Travel Rule software enables VASPs to be compliant regardless of the changes in the Travel Rule market and solutions. Supporting several methods of communication puts a VASP in a safer position where it is less dependent on only one solution. Furthermore, it allows VASPs to be reachable by more counterparties and keep transacting without interoperability blockers.
21 Travel Rule has been built to keep businesses transacting regardless of their newest compliance challenge: the Travel Rule. As 21 Travel Rule is multiprotocol, it already supports several protocols while keeping up with the latest open approaches from the market. 21 Travel Rule future-proofs VASPs by being on top of whichever direction the Travel Rule market follows, ensuring businesses do not need to follow the new technologies or develop the missing pieces internally. Or, even worse, become unconnectable to their counterparties because of technical details like their protocol choice.
21 Travel Rule is a multiprotocol solution that supports email as a fallback and offers VASPs a solution to the sunrise issue. VASPs can be rest-assured that they are compatible with every VASP in the market, now and always.
What makes 21 Travel Rule even more attractive is that it is the only Travel Rule solution with built-in GDPR compliance; nobody apart from the VASP who has installed the solution has access to customers’ delicate data, perfectly compliant with the Travel Rule.
Choose the right Travel Rule solution for your business and remain future-proof.