Lightspark Introduced Travel Rule Compliant LNURL for Regulated Entities
According to Lightspark, Universal Money Address (UMA) is a global and open-source 'email' address for money. It aims to let 'anyone' to send and receive money (fiat and crypto) 24/7 using their favorite UMA-enabled wallet, exchange, or bank.
"Open sourcing the Universal Money Address (UMA) standard. Money needs to move like email, so we’ve extended Lightning and LNURL to support compliance and FX. Users will be able to send/receive fiat & crypto via their UMA-enabled exchange, wallet, or bank," announced Lightspark's David Marcus earlier this week.
"Exchanges, wallets, and banks can integrate UMA and information received through UMA into their existing compliance programs, including blockchain analytics, money laundering, sanctions screenings, and travel rule purposes."
The sender’s Virtual Asset Service Provider (VASP) contacts the receiver’s VASP using the recipient’s UMA, gathering essential information like the receiver’s preferred currency and applicable legal regulations.
The sender then specifies the amount to send in the receiver’s currency, incorporating all requisite legal and compliance data.
Following this, money is transferred using standard Lightning Network procedures. An invoice is generated by the receiver’s provider, which the sender settles.
Finally, the transaction is logged with a compliance provider for record-keeping and any subsequent analysis.
According to Marcus, "UMA extends LNURL, so it's 100% backwards compatible" with LNURL. This means that users should be able to use regular Lightning wallets to pay UMA invoices, although its end point implementations are going to vary.
"Bitnob, an Africa-focused cross-border payments company, has already jumped on board, becoming the region’s first to adopt UMA as part of the company’s own growth and activation program," reported Blockworks.
"Additional adopters are expected to include industry players like Coins.ph, Foxbit, Ripio, and Xapo Bank, focusing primarily on cross-border transactions."
Infrastructure platforms Bakkt and Zero Hash have announced plans to incorporate UMA into their service offerings, extending the standard’s reach further, Lightspark said.