ING develops friendly protocol for tracking crypto transfers. The bank developed a protocol to assist with the requirement of the Financial Action Task Force’s Travel Rule for crypto exchanges and firms dealing in digital assets.
ING ‘s approach – currently called the Travel Rule Protocol or TRP – has also been endorsed by Standard Chartered Bank, Fidelity Digital Assets and BitGo, plus a gaggle of other common crypto space firms.
The FATF’s recommendation in October 2018 to include virtual asset service providers (VASPs) within the scope of its anti-money laundering mandate has spawned a raft of technical solutions and a messaging standard. However, this is the first time any bank has been involved in a crypto Travel Rule solution.
“ING, as an innovation leader on blockchain/DLT, sees increasing opportunities with regard to Digital Assets on both asset-backed and native security tokens,” Hervé Francois, Blockchain Initiative Lead on Digital Assets at ING, mentioned. “With a regulatory first approach, we are actively involved in different working groups to support standardization of this emerging ecosystem and ultimately pioneer mass adoption.”
A source close to ING said last year the bank began to look for solutions to the FATF’s “Recommendation 16” on digital assets. The plan was to “get an understanding of where the industry is going and see what the opportunities would be for banks when they can play in that space,” said the source. “To be clear, ING is not looking at doing anything with crypto assets and payment tokens like bitcoin,” said the source. “The focus, for now, is more on security tokens and things like that.”
The protocol features a RESTful (Representational State Transfer) API, a way of transferring data from one place to another on the internet. Participating VASPs must be able to publish address entries; by doing so they associate an identity and data linked with that address entry, the TRP document says.
The takeaway from this Travel Rule “experiment” is that banks like ING and U.K.-based Standard Chartered Bank are quietly moving closer towards the world of crypto and regulated virtual asset service providers (VASPs).