The International Digital Exchange Association (IDAXA) has proposed a new protocol that would allow cryptocurrency exchanges to meet requirements stipulated by the Financial Action Task Force (FATF) in June.
IDAXA, a crypto industry group with members representing exchanges from various jurisdictions, announced the new OpenVASP protocol at the ongoing Blockshow conference in Singapore.
The initiative per a release shared with Stmarket.co will enable virtual asset service providers to transmit blockchain transaction information privately, immediately, and securely, in compliance with the Financial Action Task Force (FATF) Recommendation 16, also known as the “travel rule.”
Leading Swiss-crypto company, Bitcoin Suisse spearheaded the development of the initiative, which now has a whitepaper and is available for industry participants who wish to contribute to its advancement.
A key proposal of the OpenVASP protocol is a system that allows exchanges across multiple jurisdictions to transact between themselves without necessarily knowing each other and without the need to register with a central authority or database.
The system would notably use structured payment messages, end-to-end encryption, perfect forward secrecy, and a smart-contract layer for managing the identity of the transacting parties irrespective of their location.
Commenting on the development, Anson Zeall, Chairman of Singapore’s Crypto Association, noted that the new initiative upholds the values of blockchain technology, and both IDAXA and the involved stakeholders hope that the new effort will garner the support of the wider crypto community.
IDAXA, as Stmarket.co reported in the past, was formed at the V20 summit and has since had different crypto trade groups from various jurisdictions join the movement to meet global regulatory standards for the emerging crypto industry.
Learn more about the FATF crypto rules and what it means for you.