Electronic payment platform PayPal has joined the Travel Rule Universal Solution Technology (TRUST) network, joining a number of other industry heavyweights in agreeing to follow the new regulations for transporting digital assets.
TRUST Network identifies PayPal as a cryptocurrency that can help with its reporting requirements.
The announcement comes after the payments giant released the necessary infrastructure in June to enable consumers to buy, sell, and send digital assets between PayPal and the rest of the exchanges. Before PayPal’s debut in the respective market in October of 2020, clients could only buy and trade cryptocurrencies within the PayPal marketplace.
In February, a group of up to 18 VASPs from the United States unveiled TRUST. Popular early participants included Robinhood, Kraken, Circle, Paxos, and Coinbase. Due to PayPal’s rapid expansion, the original group of about thirty-five has grown to include roughly forty people.
As stated in a press release issued by Coinbase on August 23rd, the integration of PayPal represents yet another milestone in the endeavor of TRUST to become the international, industry-level solution dealing with Travel Rule Compliance.
U.S.-based VASPs are required by rule 31 of the Bank Secrecy Act (BSA), sometimes referred to as the “Travel rule,” to obtain and submit to another financial institution details relating to the transactions of customer funds. Identifying the parties involved in money transfers and the persons who are supporting them begins at a threshold of $1,000.
Increased Adherence to Anti-Money Laundering and Anti-Terrorism Policies Is a Priority for TRUST
Therefore, a consortium of VASPs in the United States established TRUST to facilitate more convenient and transparent information sharing among themselves; this would include modernizing reporting. TRUST employs a solution based on two main components, a central bulletin board for the detection of every VASP entity on both sides of a transfer and a point-to-point (P2P) encrypted channel, to ensure the safe flow of data.
The group came together after the Financial Action Task Force (FATF) endorsed in June of 2021 that all VASPs operating anywhere in the world have to adhere to specific standards relating to anti-terrorist funding (ATF) and anti-money laundering (AML) policies.