Challenges with unhosted wallets

FATF Recommendation #16 requires VASPs and financial firms to share personal data for virtual asset transfers to tackle money laundering. Currently, VASPs are choosing providers or developing in-house solutions for data sharing, but a critical aspect remains unaddressed—ensuring compliance with the travel rule for unhosted wallets, a fundamental element in DeFi. 
 

Challenges in Issuing MiCA Compliant EMTs
 

One of EMI's strategic goals is to issue electronic money tokens (EMTs) compliant with the Markets in Crypto-Assets (MiCA) regulation on the public ledger / network. A primary challenge is managing the circulation of EMTs among participants who are not subject to Know Your Customer (KYC) procedures. These participants may redeem EMTs for fiat currencies or transact within the digital ecosystem without redemption, raising significant regulatory concerns.

 
Trust us - DeFi experts - and explore the compatibility of unhosted wallets & built-in compliance for EMT with Micapass for comprehensive compliance.