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Bank Wire


A bank wire is a communication system used by financial institutions and individuals to facilitate and record transactions. The “wire” is the alert and notification messaging system which allows connected banks to collect information about their clients and account activity by sharing data amongst one another. Bank wires relay information to connected banks on a daily basis or at the request of a client.

Wire Transfers

Wire transfers are generally regarded as secure for transactions. Information sent through the wire is used in an attempt to form consensus on the validity of a transaction. However, that information is not stored on a decentralized blockchain like Bitcoin.

This makes bank wires inferior to the blockchain for achieving true consensus and immutability, although bank wire transfers are generally considered safe compared to other legacy payment options. Similarly, bank wire services charge significant fees, typically near $50, and take several business days to process, whereas whereas new Bitcoin transactions are processed on average every ten minutes.

The Travel Rule

Bank Secrecy Act (BSA) section 31 CFR 103.33(g) sets forth The Travel Rule, which instructs financial institutions that participate in wire communications and transfers to record and preserve an information trail. The Travel Rule allows law enforcement agencies to monitor financial transactions.

Financial institutions that transmit or receive money must obtain the name and address of transacting parties, account number, amount of money, and execution date of a transaction to achieve BSA compliance. In that way, the Travel Rule mimics the U.S. Treasury’s recordkeeping rules pertaining to the transmission of funds on the wire, forcing banks to cooperate with law enforcement investigations.

Learn more about alternatives to the bank wire.