Crypto can move across the world in seconds. But increasingly, information has to move with it too.
The Travel Rule, established internationally by the Financial Action Task Force (FATF), requires regulated crypto businesses to collect and, in certain circumstances, share information about the sender and recipient of a crypto transfer.
This can mean providing or verifying details about who is sending the crypto, who is receiving it and where the assets are going, particularly when regulated providers are involved. The aim is to bring digital asset transfers closer to the AML standards already applied across traditional finance.
It can also mean that some crypto transfers take a little longer. A transaction that is technically capable of settling on the blockchain almost instantly may first need to pass identity, wallet and compliance checks. If information is missing or needs further verification, the provider may hold the transfer until those checks are complete.
This creates an interesting contrast: the blockchain hasn’t become slower, but the process around using it has become more regulated.
The Travel Rule is another sign of crypto becoming part of the mainstream financial system, bringing more safeguards, but also some of the checks and friction we’re familiar with in traditional finance.
