Proposed Travel Rule ruffles some feathers

More details asked of digital asset firms

- NAREERAT WIRIYAPONG NUNTAWUN POLKUAMDEE

Digital asset business operators are warning the newly proposed Travel Rule should not be overly restrictive or it could unintentionally undermine the open and decentralised nature of blockchain networks, stifling innovation.

While the new rule can help improve traceability and accountability for digital assets in Thailand, where mule accounts and financial fraud have become prominent, the details of implementation will prove crucial, said the Thai unit of the world's largest cryptocurrency exchange Binance.

"While many countries are adopting the Travel Rule, the exact design varies widely across jurisdictions. If the framework becomes overly restrictive, this may unintentionally undermine the open and decentralised nature of blockchain networks," Nirun Fuwattan anukul, chief executive of Binance TH by Gulf Binance, told the Bangkok Post.

The goal should be a balanced framework that strengthens compliance without stifling innovation, he said.

Many leading jurisdictions have adopted risk-based approaches that focus compliance efforts where risks are highest, while still allowing the technology to function as intended, said Mr Nirun.

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