Travel Rule
Quick Answer
The Travel Rule requires VASPs to share sender/receiver identification for qualifying transactions, originating from FATF Recommendation 16 to prevent money laundering in cross-border crypto.
Full Definition
The Travel Rule is a regulatory requirement from FATF Recommendation 16 that obligates VASPs to share sender and receiver identification for transactions above certain thresholds. In crypto, this means payment providers must collect and transmit originator and beneficiary data. Travel Rule compliance solutions include TRISA, Notabene, and Sygna. The rule aims to prevent money laundering and terrorist financing in cross-border crypto transactions.
Related Terms
Testnet
A testnet is a separate blockchain using valueless tokens for development testing. Payment integrations should always be tested on testnets (Sepolia, Amoy) before mainnet deployment.
Token
A token is a digital asset created on an existing blockchain via smart contract standards (ERC-20, BEP-20). Payment gateways convert any supported token to the merchant's settlement preference.
Tokenisation
Tokenisation represents real-world assets (property, equity, invoices) as digital tokens on blockchain, enabling global transfer, fractional ownership, and programmable payment models.
Transaction Fee
Transaction fees combine network fees (gas) and service fees. Crypto gateways typically charge 0.5-1.5% versus card payments' 1.5-3.5%, with even larger savings on cross-border transactions.
Transaction Hash (TxHash)
A transaction hash is a unique hexadecimal identifier for a blockchain transaction, used to track payment status on block explorers and provide irrefutable proof of payment.
TVL (Total Value Locked)
TVL is the total crypto deposited in a DeFi protocol's smart contracts. Higher TVL in liquidity pools means deeper liquidity and better exchange rates for payment settlement.