US financial institutions will be required to collect, retain and transmit certain information about international fund transfers worth as little as $250 under a new rule outlined today in a joint notice by the Financial Crimes Enforcement Network (FINCEN) and Federal Reserve Board.

FinCEN is proposing to reduce the applicable threshold for its “travel rule” from $3,000 to $250 for transactions that begin or end outside of the US. This means financial institutions will have to transmit Know Your Customer and anti-money laundering information to other financial institutions in the payment chain.

It is also proposing to alter the meaning of the word “money” in the regulations to ensure that it includes convertible virtual currencies (CVCs).

Jamison Sites, blockchain and digital asset tax lead at auditor RSM, told Forbes: “The proposed rules give greater clarity and regulatory certainty to those operating with CVCs. This will be a positive for the industry.”

The Financial Action Task Force also adopted the travel rule for cryptocurrencies in 2019. A FATF report on VASPs published in the summer revealed 35 out of 54 jurisdictions have now put in place measures to comply with the revised standards. In the summer FATF decided to review countries progress for  another year, effectively giving countries another year to transpose the travel rule requirements into domestic laws.

However some virtual asset service providers have raised concerns about the impact of the travel rule on privacy and data protection law compliance. Last month, Teggy Altankhuyag of Coinfloor, said: “Some requirements of GDPR and the travel rule seems incompatible at this stage, not least the fact that bulk transfer of personal data to the US is not allowed under GDPR.”

A non-profit group of VASPs has also produced a free API tool to help service providers share information in compliance with the FATF rule.