New Cross-Sector Report on the Implementation of the Travel Rule – Key Challenges and Recommendations for the Sector

Adan, CryptoUK, and Global Digital Finance have jointly published a new report outlining the short-term challenges and strategic recommendations for the effective implementation of the travel rule for CASPs.

As the deadline approaches, companies continue to face operational challenges that could jeopardize the goals of the travel rule. In particular, persistent issues related to protocol interoperability, the verification of self-hosted wallets (SHWs), and counterparty due diligence are creating fragmentation and compliance uncertainty in the European digital asset landscape.

This document reflects the input from CASPs surveyed across Europe and offers six clear and concrete recommendations:

1. Extension of the transition period
2. Establishment of a permanent public-private working group
3. Proposal for a transitional arrangement until the provisions regarding the verification of ownership of SHWs are fully implemented
4. Adoption of a risk-based approach to SHW obligations
5. The EU should support and promote the establishment of a harmonized, publicly accessible register of authorized PSVAs to facilitate basic verification and improve risk assessment across jurisdictions, thereby reducing the need for direct outreach and case-by-case investigations
6. Encourage the relevant national authorities and European authorities to ensure legal consistency in the application of these rules

We remain committed to working with European authorities, national regulators, and our industry partners to ensure that the data transfer rule is implemented in a way that is effective, adaptable, and conducive to innovation.

Thank you to GDF and CryptoUK, as well as our member companies, for their contributions.