Approval Policy

Overview

Approval Policy is a formal set of conditions determining who must review or authorize a wallet, vault, account, or transaction action before execution. A valid signature proves that the relevant signing authority approved a particular payload; it does not prove that the signer understood the request or that the request was economically safe. Payload interpretation and policy enforcement remain essential.

It defines governance logic and can be enforced by software, smart contracts, custodians, or operating procedures. It should be distinguished from Offline Signing, Air-Gapped Signing, and Secure Signing. These concepts may interact in one workflow, but they identify different control points, records, or security assumptions.

Operationally, policies specify thresholds, roles, amount tiers, destinations, asset types, time windows, segregation of duties, emergency paths, and change controls. A production implementation should preserve the applicable blockchain network, asset or contract identifier, source and destination ownership, policy version, responsible roles, timestamps, transaction identifiers, and evidence used to authorize or reconcile the action. Exceptions should be visible in an operational queue rather than silently corrected.

The principal risk is that overly broad exceptions, stale approvers, policy bypasses, or ambiguous thresholds can nullify otherwise strong custody controls. Teams should test normal and exceptional paths, including delayed confirmations, reorgs, unavailable custodians, signing-device failure, stale permissions, incorrect network selection, fee spikes, duplicate requests, compromised user interfaces, and incomplete recovery data. High-value actions should be independently reviewed before execution.

For governance and audit, document the exact meaning of Approval Policy in the relevant wallet, custody platform, smart contract, or internal ledger. Confirm who can create, change, approve, pause, reverse, or recover the associated configuration. Monitoring should cover privileged access, policy changes, address and key lifecycle events, balance movements, failed transactions, reconciliation differences, and unresolved customer claims. This converts the term from a product label into a testable operational control.