Summary

  • The Treasury Department’s FinCEN and the Fed said they had withdrawn a plan to lower the travel rule threshold for cross-border transfers to $250 from $3,000.
  • As a result, the $3,000 threshold that applies to transfers by banks and qualifying virtual asset service providers will remain in place.
  • The agencies said they may revisit separate revisions in the future to reflect changes in the stablecoin regulatory framework and broader digital asset policy, and would seek additional public comment if they do so.

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The US Treasury Department’s Financial Crimes Enforcement Network, or FinCEN, and the Federal Reserve have withdrawn a plan to lower the travel rule threshold for cross-border transfers to $250 from $3,000.

Crypto news outlet The Defiant reported on Nov. 6 that FinCEN and the Fed filed a joint notice withdrawing a 2020 proposal to reduce the threshold for recordkeeping and information sharing on cross-border transfers. The withdrawal is set to take effect on Nov. 9.

That leaves the current $3,000 threshold in place. The standard applies not only to banks but also to transfers handled by virtual asset service providers that meet certain requirements.

The travel rule requires financial institutions to verify information such as the sender and recipient when transferring funds above a certain threshold and to pass that information to the next financial institution in the chain. Under existing FinCEN guidance, crypto transfers of $3,000 or more may also fall under the rule.

The proposed revision would have lowered the threshold to $250 for transfers that begin or end outside the US. It also would have explicitly added convertible virtual currencies and digital assets with legal tender characteristics to the rule.

The agencies cited the passage of more than five years since the proposal was introduced, along with major changes in the crypto industry and related legal frameworks, as reasons for the withdrawal. They added that they may consider separate revisions in the future to reflect recent developments in stablecoin regulation and shifts in US government digital asset policy.

FinCEN and the Fed said they would seek additional public comment if they pursue similar rules in the future.

Minseung Kang