TAP Parties

Parties are a fundamental concept in the Transaction Authorization Protocol (TAP). They represent the legal entities involved in blockchain transactions and form the foundation of TAP’s compliance capabilities.

What is a Party?

A Party in TAP represents a legal entity that:

  • Has a verifiable identity (typically through DIDs)
  • Can be subject to regulatory requirements
  • Holds legal responsibility for transactions
  • Manages one or more agents that execute transactions on its behalf

Examples of parties include virtual asset service providers (VASPs), financial institutions, corporations, merchants, and in some cases, individual customers.

Party Roles in Transactions

The roles of parties in TAP are dependent on the specific transaction type:

  • In Transfers, parties act as Originators (sending assets) and Beneficiaries (receiving assets)
  • In Payments, parties take the roles of Customers (paying for services/goods) and Merchants (providing services/goods)
  • Intermediary Parties may facilitate transactions between other parties and are typically implemented as Agents that follow the TAP Agent architecture

Each transaction type defines specific responsibilities and compliance requirements for the involved parties. For detailed information about transaction types and associated party roles, see the Transaction Types documentation.

Party Identity

Each party in TAP is identified through:

  1. Decentralized Identifiers (DIDs): Provides a cryptographically verifiable identity
  2. Verifiable Credentials: May provide additional attestations about the party
  3. Relationship Proofs: Document connections between parties and their agents

Party Attributes

Parties in TAP may have various attributes that describe their characteristics:

  1. Name: Human-readable identifier for the party
  2. Legal Entity Identifier (LEI): For institutional parties, a globally recognized identifier
  3. Merchant Category Code (MCC): Optional ISO 18245 code for merchant parties that identifies their business type (e.g., “5411” for grocery stores, “5812” for restaurants)
  4. Contact Information: Methods for reaching the party outside of the TAP protocol
  5. Regulatory Status: Information about regulatory compliance and licensing

Party Management Messages

TAP includes specific messages for managing party information:

UpdateParty

The UpdateParty message allows participants to update party information during an ongoing transaction or relationship. This might include:

  • Updated legal entity information
  • Changed regulatory status
  • Revised compliance policies
sequenceDiagram
    participant A as Party A
    participant B as Party B
    A->>B: Transfer
    Note over A: Entity information changes
    A->>B: UpdateParty
    Note over B: Updates party records
    B->>A: Acknowledge

Implementation Considerations

When designing party support in TAP:

  1. Party Registration: Establish a secure process for registering and verifying parties
  2. Identity Management: Maintain accurate and up-to-date party information
  3. Regulatory Alignment: Ensure party information fulfills relevant regulatory requirements
  4. Privacy Considerations: Balance compliance needs with data minimization principles
  5. Relationship Management: Maintain clear records of relationships between parties and agents

Technical Integration

For technical details on party data structures and message formats, see the full message reference.