ISO 20022 Crypto is a new standard that could lead to better communication between cryptocurrency and traditional financial systems, and will allow cryptocurrency payments such as SWIFT payments systems to integrate more seamlessly.
Ripple (XRP) has already met ISO 20022 compliance, with other coins like Stellar Lumens (XLM) expected to follow suit soon. Investors should keep an eye out for these coins as they could gain in value over time.
ISO 20022 is an international standard for financial messaging
ISO 20022 could revolutionize how we exchange money worldwide. Financial organizations will find it simpler to manage more data, which in turn enables them to offer superior services and products, manage liquidity more effectively, forecast ahead and remittance information more transparently and increase competition within their sector.
Migration to ISO 20022 presents global corporates with an exceptional challenge. It requires extensive changes to systems and technology in order to support its new message format; banks need an ally who can assist this effort and guarantee compliance with this standard.
Companies adopting ISO 20022 will reap benefits such as enhanced Nostro reconciliation, daily liquidity management, billing reporting and AML checks – enabling them to improve efficiency while cutting costs. A successful migration to ISO 20022 however requires considerable resources as well as top management approval and support.
It is based on the XML data format
ISO 20022 crypto standard is built upon the XML data format, making it simpler for traditional financial institutions to exchange information. Banks using this protocol will be able to transmit more efficiently while decreasing risks related to fraud or errors and speed up customer reconciliation processes.
The new message standards will enable greater granularity and structured data richness for payment transactions, providing substantial benefits across the payment chain. They eliminate intermediary reformatting costs while simultaneously increasing accuracy; furthermore they enable banks to send and receive more detailed transaction-specific details about any given transaction.
Society for Worldwide Interbank Financial Telecommunication, or SWIFT, the global messaging system used by banks will implement ISO 20022 message formats by 2022 progressively; eventually they will replace current MT category 1, 2 and 9 messages by November 2025.
It is designed to improve the efficiency and accuracy of financial transactions
ISO 20022 Crypto provides a new data format for financial transactions that makes integrating cryptocurrency easier, while simultaneously improving security and increasing transparency. Institutions will also benefit from being able to send more granular payment information that reduces transaction errors while increasing operational efficiency.
ISO 20022 will enable banks to utilize one language for sending payments across their networks, speeding up transaction time while improving security and creating innovative products. In addition, this standard will bring together formats and data elements which were once incompatible.
Ripple is currently the world’s most widely traded ISO 20022 compliant cryptocurrency and sits on its standards body – which increases the chances that more financial institutions adopt its use. Stellar Lumens and MIOTA also comply, with Cardano (ADA) on track to become compliant.
It is not specific to cryptocurrencies
ISO (International Organization for Standardization) develops standards across numerous industries, such as healthcare, agriculture, shipping, weaponry and metallurgy. These standards help ensure products adhere to government regulations while increasing customer safety while making exporting easier for manufacturers.
Future development may see ISO 20022 compliant cryptocurrencies become more accepted by traditional banks, making integration easier with existing systems and possibly leading to an increase in price; investors should keep this factor in mind when investing.
Numerous cryptos, including IOTA and Algorand, are already ISO 20022 compliant, with the XDC Network as the latest to adopt this standard and seamlessly integrate into existing financial systems and increase interoperability within the cryptocurrency industry. This will facilitate cross-border transactions more efficiently while increasing transparency while decreasing fraud risks associated with money laundering activities.
