Published on: 2021-07-16T21:42:16+00:00
In a message to the bitcoin-dev mailing list, Karel Kyovsky has proposed standardizing a new bitcoin URI parameter name. The purpose of this proposal is to integrate the travel rule for Bitcoin ATMs, where the operator must make an effort to identify the Virtual Asset Service Provider (VASP) hosting the user's wallet and send customer identity data. Currently, when using a Bitcoin ATM, users show a QR code containing their wallet address, insert cash, and receive BTC in their wallet. The ATM operator has various options to find out the VASP, such as contacting known VASPs or using blockchain analytics tools, but these methods are not ideal. To address this issue, the author suggests enabling VASP UID in the settings of mobile wallets. This would allow the Bitcoin ATM operator to immediately communicate with the VASP after scanning the QR code, without having to search for the VASP manually. By standardizing the parameter name in the bitcoin URI, all wallet providers would use the same name, ensuring compatibility. The VASP UID could also be used as a public key to encrypt the customer's identity information before sending it to the VASP from the Bitcoin ATM.It is important to note that the directory of VASP UIDs, how VASPs can be contacted, and the method of transfer when knowing the VASP UID are not within the scope of this proposal. The author expects these aspects to be covered by third-party tools, platforms, or regulators. Compliance with US regulations is crucial for Bitcoin ATM operators and custodian wallet service providers in the US. Therefore, most custodian wallets offered on Appstore/Google Play in the US would provide their VASP UID in the bitcoin URI as a new default, with an option for users to turn it off. However, it is worth mentioning that the Travel Rule does not apply to unhosted (non-custodian) wallets.
Updated on: 2023-08-02T04:23:18.486479+00:00