Blockchain rails moves value in an internet native way. On their own, they cannot verify counterparties, align on transfer parameters, or exchange the compliance data required to approve or reject a transaction before settlement. Today, every institution is still building this coordination layer independently. As institutional volumes grow and regulatory clarity is achieved, this becomes unmanageable.
That’s the problem the Open Transaction Layer (OTL) was founded to solve, and why Fireblocks is partnering with B2C2, Blockchain Payments Consortium (includes The Open Network Foundation – TON, Stellar Development Foundation, Polygon, Monad Foundation, Solana Foundation, Sui Foundation, Mysten Labs), Checkout.com, Coins.ph, Cross River Bank, eToro, FalconX, MetaMask, Moonpay, Orbital, Privy + Bridge, Revolut, Robinhood, Securitize, SoFi, Taptap Send, Tazapay, Triple-A, WalletConnect, Wintermute, Xendit, Zengo, Zerocap,and zerohash to build a shared standard.
OTL is an open protocol stack for coordinating the full lifecycle of onchain transactions securely and compliantly, between any counterparties. It brings CeFi, DeFi, non-custodial and VASPs into a common, interoperable framework for the first time.
Before we walk through it, here’s why the industry needs it in the first place.
What’s actually missing at the operational level
The problem isn’t technical readiness. The infrastructure works and institutions are already moving trillions onchain. But to do it within their security and compliance requirements, they have to build a patchwork of bilateral integrations with different wallets and exchanges, connect vendors for Travel Rule, and create custom flows for new counterparty types or jurisdictions. Each new use case multiplies the complexity.
These gaps show up as operational costs and blockers to growth:
Reach
Institutions can only reach the counterparties they’ve directly integrated, or those on the same vendor stack. Travel Rule completion is low because networks don’t interoperate. Non-custodial wallets and AI agents are in a compliance deadlock. Coverage gaps translate directly into revenue gaps.
Coordination
There’s no standard way to initiate a transaction, deposit funds, or query an account balance across counterparties. This results in inconsistent UX and flows that break mid-journey, and ultimately impacts conversion. Without a seamless experience for users, onchain finance can’t become mainstream.
Operations
Institutions run parallel systems for transaction rails, PII exchange, and reconciliation across various wallet, blockchain, and counterparty types. Engineering and operational spend compounds.
Security
Transfers carry residual risk even when everything else checks out. Payment requests aren’t authenticated end-to-end, so a man-in-the-middle attack can tamper with the instruction and reroute funds before they settle onchain. And without verifiable identity, there’s no way to confirm an address actually belongs to the expected counterparty.
We see firsthand how these issues are preventing our customers from scaling.
Why open protocols?
We set out to address these gaps within Fireblocks. The Fireblocks Network provides a trust perimeter for institutional transactions, and within it, provider integrations, solutions for counterparty discovery, and basic coordination to help our customers transact with confidence. These solve one piece of the coordination problem, but as soon as a customer transacts with a counterparty outside of the Fireblocks Network, it stops working. Joining forces with Dynamic allowed us to also expand connectivity to over 800 consumer wallet integrations, but these connections remain bespoke.
We looked at what it would take to extend coverage. The answer was that a closed network can’t solve a coordination problem that spans every participant in digital asset finance. It just creates another silo. The issue is not a tooling gap, it’s a standards gap.
Network effects compound the value of financial products. Financial infrastructure has always scaled on neutral standards. Our goal is not to reinvent the wheel, but to combine well adopted standards like W3C DID, IVMS101 or WalletConnect into a modular stack to build coherent, interoperable flows. Standards like ISO 20022 solve structured messaging between regulated institutions, but they assume pre-established relationships. Onchain finance needs the same thing, but it has to connect a much broader participant universe across individuals, unregulated entities, non-financial businesses and AI agents.
What is the Open Transaction Layer?
The TCP/IP analogy might be the best one. The internet didn’t scale until DNS (find), SSL/TLS (trust), and HTTP (content delivery) were built on top. OTL is the equivalent for onchain finance. It’s not replacing what moves value, but standardizing everything that has to happen around it, across any asset and blockchain.
The open protocol covers the entire transaction lifecycle: discovery, payment and delivery coordination, compliance and settlement. Institutions, non-custodial wallets, DeFi protocols, and AI agents are included as first-class participants from the start, not retrofitted later.
OTL specifications cover four technical layers:
- Identity sits at the foundation. Every other piece depends on being able to identify a counterparty, authenticate their messages, and decide whether to engage. Without it, true interoperability collapses back into closed systems.
- Above identity sits three more base layers: session, transport, and messaging.
On top of OTL is the application layer, where the spec becomes operational. Applications combine protocol elements into end-to-end flows ensuring counterparty identification, payment coordination, Travel Rule are built into every interaction. Each application can be adopted independently, and scales to the entire OTL network.
What this changes at the practical level
For institutions
Reach extends to any counterparty type, jurisdiction, and use case because new flows build on a single foundation instead of demanding a bespoke integration. Operations consolidate onto one stack rather than parallel systems. Security is built in: pre-transaction coordination confirms beneficiary, terms, and identity before settlement. Every message is traced to a verified identity and tamper-proof by design.
For customers
For the customers that these institutions and providers serve, paying or receiving onchain finally works as it should, with consistent UX. No need to worry about sending a transaction to the wrong address, or wonder if a transfer from one account type to another will be supported.
For regulators
Standardized rails for identity and Travel Rule messaging creates something the current patchwork can’t: a coherent framework for securing onchain activity. And front-loading interoperability means systems communicate across the industry from the start, rather than retrofitting connections across silos later.
What comes next for OTL and the industry more broadly
OTL is open for feedback and collaboration from day one. Working specifications are public and open source at otl.network. Work is organized in working groups around real coordination problems, not theoretical frameworks, with interoperability as a hard requirement.
The first open applications on the stack will include:
- Universal deposit: A standard to initiate and coordinate a secure payment from any wallet (custodial or non-custodial) with compliance rails included.
- Wallet attribution: A decentralized way to identify the entity controlling a blockchain address before transacting, instead of each institution maintaining its own attribution waterfall.
Anyone can also build closed products on the same open foundation.
Ultimately, it all comes down to this: five years from now, do you believe there will be no standard way to validate a counterparty before sending money onchain? No standard way to communicate between participants?
We don’t. Standards have to exist for large scale institutional adoption. OTL is how we’re building them together, in the open.
Read the OTL specification and join a working group at otl.network.
