Bakkt is pleased to share that they are supporting a new open standard for money transmission: Universal Money Addresses or “UMAs.”
Bakkt has collaborated with Lightspark to be one of its initial partners, and they are pleased to announce the alpha launch of our UMA-capable Lightning service. This new service can be leveraged “for cross-border remittances, B2B settlement, instantaneous deposits and withdrawals for trading, or global, interoperable P2P.”
By leveraging our institutional-grade custody platform, best execution liquidity, fiat onramps, money transmission licensing, compliance infrastructure, and now Lightning service, we believe Bakkt is “positioned to serve as the secure and reliable platform powering payments, remittances, P2P transfers, and on and off-ramps in the United States.”
They are excited to enable this for their clients as together we tear down silos of value “in the same way the Internet tore down silos of information.”
While trading and custody will always be at Bakkt’s core, they have spoken many times about the evolution of bitcoin from a speculative asset to powering everyday utility.
They share Lightspark’s vision “for Internet-native payments, with Bitcoin serving as the neutral, liquid Internet-native asset.” Together with Bitcoin, the Lightning Network, “a scaling solution that makes Bitcoin transactions instant, cheap, and borderless, forms the backbone of revolutionary payment rails.”
But you shouldn’t have to be “a bitcoin enthusiast to get these benefits.” You don’t even “have to own bitcoin.”
Their clients and their customers need “not know or care that bitcoin is being used under the hood.”
They also do “not need to hold bitcoin.”
They take care of the transaction logistics on the network for them. Bitcoin becomes “a money transmission protocol that enables fiat-to-fiat transfers. Bitcoin optional.”
Senders can send dollars and receivers can receive pesos— in seconds.
UMA enhances Lightning for businesses
So, the Internet now has “a native asset to hold value in bitcoin, and a native rail to transfer value in the Lightning Network.”
The Lightning Network already “has human readable identities with Lightning Addresses. Companies can already convert bitcoin to their local currency and vice versa.”
As explained in the update, UMA enhances standard Lightning capabilities “by adding the ability to check if the recipient is at a regulated Virtual Asset Service Provider (VASP).”
It also confirms if the Travel Rule “applies and for what amount, and if the end recipient has been verified through KYC, with plugins for popular compliance transaction screening tooling. Since UMA is an extension of LNURL, transactions can gracefully fall back to normal Lightning transactions depending on the VASP’s risk tolerance.”
Bakkt’s institutional-grade platform “combined with Lightspark’s enterprise-ready infrastructure for the Lightning Network, enhanced with an open standard in UMA, make an powerful combination for any business looking to provide payments, remittance, or peer-to-peer transfer capabilities.”
