- To become compliant with FATF AML rules, crypto firms invented a new standard.
- The solution will define a uniform model for data traveling with crypto payments.
- The solution came from a Joint Working Group, established by several industry bodies.
Financial Action Task Force (FATF) created strict anti-money laundering regulations that are causing issues for plenty of crypto firms. As a result, these companies made an effort to find a solution that would help them operate while still respecting the rules.
The crypto industry gets a solution for a long-standing issue
The new solution came out only today, and it revolves around a new messaging standard called IVMS101.
The new standard defines a uniform model that data must follow when it comes to its exchange by VASPs. This is the data that virtual asset service providers swap alongside crypto transactions. It can serve to identify the pseudonymous receivers and senders of digital currency payments.
However, the real major step was to get industry players to agree to the new standard. With this achievement, the crypto industry has taken a major step towards becoming more regulated. The next move that will take place is incorporating the new standard into various solutions. This is the only way to ensure that the industry will meet the requirements of the so-called Travel Rule.
Siân Jones, who acts as a convener for the Joint Working Group of InterVASP Messaging Standards commented on the achievement. Jones said, “I’m pleased to confirm that the working group approved the final text and that the IVMS101 data model standard now exists.”
Will the new standard help?
There will be plenty of benefits to the IVMS standard implementation. Some of them include data traveling in an automated fashion, as well as lower risks and reduced costs. At the moment, the standard is in the hands of three industry bodies that originally established the joint working group. Those include the CDC (Chamber of Digital Commerce), GDF (Global Digital Finance), and IDAXA (International Digital Asset Exchange Association).
IDAXA stated that the industry has been working hard to comply with FATF rules, although there were challenges. One of them — the establishment of a common standard — is now a reality, and that is a major step in the right direction. With this solution, the industry can now focus on other pressing matters and make its way towards becoming regulated and adopted.