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Peer-to-Peer (P2P)

Peer-to-peer (P2P) describes a decentralised way of communicating and interacting, where individuals in a network, called peers, can directly engage with each other without intermediaries or central authorities. In this setup, everyone has the same status and can ask for or offer resources and services as required.

The FATF defines Peer-to-Peer Transactions as: “Virtual asset (VA) transfers conducted without the use or involvement of a VASP or other obliged entity (e.g., VA transfers between two unhosted wallets whose users are acting on their own behalf). The FATF notes the inherent risks of such transfers resulting from the lack of a regulated third party involved and the global reach of these assets’ movement channels”.

Peer-to-peer architectures are prevalent in various applications, including file sharing, communication systems, content distribution, and decentralised finance (DeFi) platforms. The peer-to-peer model promotes resilience, efficiency, and greater user autonomy in many networked environments.

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