Travel Rule
What information must be disclosed when making a Bitcoin payment?
The so-called Travel Rule is an EU regulation that governs what information must be collected and passed on for certain crypto transactions.
Many Bitcoin users are therefore asking themselves:
- Do I have to disclose my personal data when paying with Bitcoin?
- Is Bitcoin payment still private?
- What role does my wallet – and that of the retailer – play?
In this article, we explain in an understandable and practical way why the choice of a self-custody wallet is crucial – for payers and for merchants who want to accept Bitcoin.
Who is the Travel Rule really aimed at?
An important point right at the start:
👉 The travel rule is not aimed at Bitcoin users or traders, but at so-called Crypto Asset Service Providers (CASPs).
CASPs are regulated crypto service providers, for example:
- Bitcoin exchanges and brokers
- Custodial wallet provider
- Payment service providers that store Bitcoin for their customers
- Providers who exchange crypto for euros or vice versa
These companies are subject to EU regulation (MiCA, AML, Travel Rule) and are obliged to collect, check and, if necessary, pass on customer data.
Custody vs. self-custody – the crucial difference
Whether data must be passed on for a Bitcoin payment does not depend on Bitcoin itself, but on the form of custody.
Custody(third-party custody)
- Your Bitcoin is stored by a third party
- z. e.g. with an exchange or a payment provider
- The provider is obliged by CASP → regulatory requirements
- KYC, identity verification and data storage are mandatory
Self-custody
- You hold the private keys yourself
- Self-custody hardware wallet like: BitBox, Ledger, Trezor
- Self-Custody Lightning Wallets like: Wallet of Satoshi, Breez, Zeus, Phoenix
- No third party stores your Bitcoin
- No CASP involved
- No disclosure of personal data required
👉 Self-custody means: control over Bitcoin and your data.
Example: From buying Bitcoin to your own wallet
Let’s say you buy your first Bitcoin from an exchange or broker:
- You go through a complete KYC process
- Your identity data is already available there
- As long as the Bitcoin is there, it is in custody
If you then transfer your Bitcoin to your own hardware wallet, the following happens:
- The exchange checks whether the destination address:
- belongs to another CASP or
- is a self-custody wallet
- This check is carried out, for example, by:
- Signature
- Satoshi test
👉 If a self-custody wallet is confirmed, no personal data needs to be passed on.
Lightning & payment – also without data transfer
If you want to pay with Bitcoin, you usually use a Lightning Wallet on your smartphone, e.g:
The typical process is then:
Custodialexchange → Self-custody hardware wallet → Self-custody lightning wallet
The following applies to all transfers between self-custody wallets:
- no custodian
- no payment service provider
- No data collection
- No travel rule
Bitcoin payments remain peer-to-peer.
What happens when I pay?
a) P2P payments (private)
Payments between friends or acquaintances who both use self-custody wallets:
- No registration
- No data collection
- Full privacy
b) Paying at merchants – the critical point
The merchant’s wallet is crucial here.
In practice, merchants usually use one payment provider.
There are two fundamentally different models:
Custodial payment providers: closed networks
Some payment providers (e.g. Coinify) are CASPs themselves and store Bitcoin for the merchant.
In this case:
- The provider is under a regulatory obligation
- The payer becomes a customer of the payment provider
- The questions include
- Name
- Address
- Date of birth
👉 Bitcoin payments then no longer take place peer-to-peer, but within a closed payment network.
This model is already widespread in the USA and is similar to traditional payment networks – only with Bitcoin as the technical foundation.
Such models mean that although Bitcoin payments remain technically possible, in practice they only take place within closed systems.
Self-custody payment provider: open Bitcoin payment
However, there are also European providers that deliberately work non-custodially.
A self-custody payment provider:
- does not store Bitcoin
- does not carry out transactions
- does not collect any payer data
Instead, it operates purely as a software provider:
- Creates payment invoices
- observes Blockchain or Lightning
- forwards payment status
The transfer takes place directly between the payer and merchant wallet.
👉 No travel rule, no KYC, no data collection.
Examples of self-custody payment providers:
- BTCPay Server
- Coinsnap
- Flash
- Zaprite
Why retailers should rely on self-custody
This model offers clear advantages for retailers:
- No purchase interruption due to registration processes
- Faster payments
- Better conversion
- No unnecessary storage of customer data
- Clear separation between payment and customer data
👉 For the delivery of an order, the data that the retailer needs anyway is sufficient.
Any additional payer data must remain protected.
Conclusion: self-custody is key
Regulation does not lead to the end of private Bitcoin payments, but to a clear separation of the models.
For payers:
- Self-custody of Bitcoin
- Use self-custody lightning wallets for payments
For dealers:
- Choose self-custody payment provider
- Enable open peer-to-peer payments
Whether Bitcoin remains an open payment system will be decided less by the regulation itself than by the technical architecture of the payment providers used.
Self-custody is the trump card – for the storage, payment and acceptance of Bitcoin.
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