What is the travel rule?
The travel rule is the duty of a bank or payment provider to send the name and account details of payer and payee along with a transfer, so every institution in the chain knows both parties. It started with wire transfers (FATF Recommendation 16) and applies in the EU to crypto transfers since .
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The travel rule in brief
| Term | Travel rule. The EU act in German: Verordnung über die Übermittlung von Angaben bei Geldtransfers und Transfers bestimmter Kryptowerte. |
|---|---|
| Global standard | FATF Recommendation 16 on wire transfers; revised on , with the changes in effect by the end of 2030. |
| EU law | Regulation (EU) 2023/1113 (Transfer of Funds Regulation), applies since (Article 40). |
| Thresholds | Wire transfers inside the EU: full data on request above EUR 1,000 (Article 5). Crypto: no minimum amount; extra check above EUR 1,000 for self-hosted addresses (Article 14(5)). |
| Supervisors | BaFin (GwG § 50), FMA (FM-GwG § 25), FINMA. |
What is the travel rule in banking?
In banking, the travel rule is the list of data that must travel with a credit transfer. Article 4 of Regulation (EU) 2023/1113 requires the payment service provider of the payer to send the payer's name and payment account number, and the address with country, official document number and customer number, or the date and place of birth. For the payee, the name and account number are required. The provider verifies the payer data against a reliable and independent source before it sends the money (Article 4(4)).
Inside the EU, the account numbers of both sides are enough. The full payer data follows within three working days if the bank of the payee asks, for transfers above EUR 1,000 (Article 5).
Where does the travel rule come from?
The travel rule comes from FATF Recommendation 16 on wire transfers. Before 2023 the EU applied it through Regulation (EU) 2015/847. In June 2019 the FATF extended its standards to virtual assets and virtual asset service providers, and Regulation (EU) 2023/1113 recast the EU rules to cover crypto-asset transfers (recitals 1 and 2).
On the FATF published changes to Recommendation 16, "also referred to as the 'Travel Rule' in the context of virtual assets". They are meant to make the information in payment messages consistent and will come into effect by the end of 2030.
What is the travel rule in crypto?
The travel rule in crypto is the same duty for crypto-asset service providers that move cryptocurrency and other crypto-assets for clients. It applies when the provider of the originator or of the beneficiary has its registered office in the EU, including transfers through crypto-ATMs (Article 2(1)). The provider of the originator sends the originator's name, distributed ledger address and crypto-asset account number, the address or date and place of birth, and the beneficiary's name and ledger address (Article 14(1) and (2)).
The data does not have to sit on the blockchain. It travels "in advance of, or simultaneously or concurrently with" the transfer, in a secure manner (Article 14(4)). Article 14 sets no minimum amount for crypto transfers; the review clause asks the Commission to assess the costs and benefits of such thresholds (Article 37).
How do the rules for wire transfers and crypto compare?
| Aspect | Wire transfers | Crypto transfers |
|---|---|---|
| Who sends the data | Payment service provider of the payer | Crypto-asset service provider of the originator |
| Account identifier | Payment account number | Distributed ledger address and account number |
| Threshold inside the EU | Full data on request above EUR 1,000 | None |
| Transfers to private wallets | Not applicable | Above EUR 1,000: check who owns the self-hosted address (Article 14(5)) |
| Legal basis | Articles 4 and 5 | Articles 14 to 16 |
For travel rule compliance in crypto, the provider collects and verifies the originator data and may not execute a transfer "before ensuring full compliance" with Article 14 (Article 14(8)). The receiving provider needs procedures to detect missing data (Article 16). Crypto travel rule implementation is part of AML: the regulation exists "for the purposes of preventing, detecting and investigating money laundering and terrorist financing" (Article 1).
The travel rule in Germany, Austria and Switzerland
In Germany and Austria Regulation (EU) 2023/1113 applies directly. The German Geldwäschegesetz requires crypto-asset service providers to take adequate measures that ensure compliance with it (§ 6(4a)); BaFin supervises (§ 50). In Austria the FMA supervises compliance with the FM-GwG and with Regulation (EU) 2023/1113 (FM-GwG § 25).
Switzerland has its own rules. FINMA Guidance 02/2019 of applies the Swiss travel rule to token transfers. Supervised institutions may send tokens only to external wallets of their own customers whose identity they have verified, and receive tokens only from them. FINMA applies this "without the exception for unregulated wallets" of the FATF standard and calls it "one of the most stringent in the world". This page gives no legal advice.
Sources
- European Union: Regulation (EU) 2023/1113 on information accompanying transfers of funds and certain crypto-assets,
- Financial Action Task Force: FATF updates Standards on Recommendation 16 on Payment Transparency,
- Federal Republic of Germany: Geldwäschegesetz (GwG), §§ 6 and 50, version read
- Republic of Austria: Finanzmarkt-Geldwäschegesetz (FM-GwG), § 25, version of
- FINMA: FINMA guidance: stringent approach to combating money laundering on the blockchain,