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Forgive me if it sounds stupid but I really have to understand.. In my example, we are creating a stable coin on Stellar and the Compliance Protocol seems perfect for transactions between my company and other businesses that want to host my stablecoin.

Am I thinking right that I can perform my own due diligence on those businesses and audit their actual AML processes and then set up the compliance protocol so that the transactions only be allowed between mine and the selected businesses (the ones that I’ve okayed)?

If it’s a case, then doesn’t it mean that the users of my stablecoin will never be able to send it to, for example, a cold wallet or a p2p exchange because there won’t be any compliance server on the other side?

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Not sure if I got your question right, just see if it helps.


I can perform my own due diligence on those businesses and audit their actual AML processes and then set up the compliance protocol so that the transactions only be allowed between mine and the selected businesses (the ones that I’ve okayed)?

Yes, capable.

the users of my stablecoin will never be able to send it to, for example, a cold wallet or a p2p exchange

Yes, or else you need to provide those parties some sort of way for your compliance protocol to work with.


Possible workaround: Use the authorization feature of "Allow Trust" and the "Set Options" operations. (see more here)

Brief steps:

  1. coin issuer: [Set Options] > [Set Flags] (see more here)

  2. customer: [Change Trust] > input issuer's public key & the coin

  3. coin issuer: [Allow Trust] > input customer's public key & the coin ; set flag=True

The customers/wallets/exchanges that are not yet allowed thru step 3 will be unable to handle (possess, receive, transfer) the coin. Only the allowed (trusted) customer can handle the specific coin.

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