When discussing cryptocurrency, the Achilles’ heel for financial institutions and the banking industry is regulatory compliance. ISO 20022 is an internationally recognized standard, developed and maintained by the International Organization for Standards (ISO), for financial industry messaging in payments, securities, trader services, cards, and foreign exchange domains. The standard offers more than just a set of messaging formats – it provides a common language and model for payments data, thereby improving data quality across the payments landscape.
ISO 20022 compliant cryptos promise the blend of instant value transfer obtained through the exchange of crypto on the blockchain and the regulatory compliance needed to fit traditional finance banking needs as they move further into a digital world.
ISO20022 can consolidate all the different types of messaging formats used by institutions into one single language. SWIFT is now actively migrating members to ISO 20022 standard and has been creating test environments to roll out the initiative. “ISO 20022 is being adopted around the world for high value, instant and domestic payment schemes. This migration completes the picture, providing a rich common data model for cross-border payments end-to-end, leading to improved services, more accurate compliance processes, and better STP” Stephen Gilderdale, Chief Product Officer for SWIFT.
The US Federal Reserve is also supporting the ISO20022 implementation, with plans to adopt the standard in 2023.
Ripple (XRP) and Stellar Lumens (XLM) are not only ISO 20022 compliant, but they are also members of the ISO 20022 Standards Body. Ripple alone has partnered with more than 100 financial institutions including the Canadian Imperial Bank of Commerce, and Stellar Lumens has partnered with VISA. Both cryptos support ISO 20022 compliance with their distributed ledger technology.