Cross-border compliance

Different countries have different regulation rules (eg. AML). What financial regulation rules do Diem comply and implement now (I find there are codes that comply with KYC and travel rule)? If Diem is used worldwide and processed a number of cross-border transactions in the future, will it implement every rule of every country in the future? Or only implement a common set of these rules?

Moreover, I found in documentation and community that Diem will let wallet providers implement and support their own compliance mechanisms, which is the same as the way in some CBDC reports. Will there be some standards to guide wallet providers to implement this?

Additionally, the KYC requires national ID of user. How to check the correctness of that? Will wallet provider connect to the national identity system of every country to check the information and provide wallet services? How to prove security of the information when process cross-border transaction (travel rule)?

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Hi Kongzhu,
I like your post and querries and poses the same questions here in my country. Here the Central Bank of Mauritius has launched MauCas and proposing an API to any payment system project,
I am waiting for the Diem payment launch. I do not know all the legal implications yet.
What are your views.
Regards
Harold Marie
:mauritius: Diem Mauritius

Hi Harold,

I do not exactly know what approach Diem will implement in this question. But I guess that many central banks will provide APIs to commercial payment platforms, like what MauCas do.

If governments and central banks force commercial payment platforms (or wallet providers) to connect their APIs to access their functionalities (like core ledger), I think Diem can delegate local agents in different countries or regions, which can implement specific functionalities according to their local laws or rules, and standards of Diem Association.

But the compliance and privacy issues of cross-border transfer is still a problem.

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