The World Economic Forum (WEF) has been actively promoting the adoption of ISO 20022 as a global standard for financial messaging. This is done through various initiatives and partnerships with financial institutions, central banks, technology companies, and standard-setting bodies.
The WEF believes that the adoption of ISO 20022 can improve the efficiency and security of financial transactions, reduce costs and errors, and create new opportunities for innovation.
The WEF also supports the development of the standard by providing a platform for stakeholders to share best practices and collaborate on implementation efforts. Additionally, the WEF also works to raise awareness of ISO 20022 and its benefits among policymakers, regulators, and other stakeholders in the financial services industry.
Ripple is a technology company that provides a blockchain-based payment protocol, called XRP Ledger, that facilitates cross-border payments and money transfers.
Ripple’s technology is built on the ISO 20022 standard. By using the ISO 20022 standard, Ripple’s payment protocol can communicate with other financial systems and organizations, making it easier for banks, payment providers, and other financial institutions to exchange information and process transactions.
This allows Ripple’s payment protocol to facilitate cross-border payments in a more efficient and secure way. Additionally, Ripple is also a member of the ISO 20022 Registration Management Group (RMG) which is a group of experts from the financial industry and standardization bodies that helps to develop and maintain the ISO 20022 standard.
I am not a financial advisor. Do your own research before investing.
As the world move closer to widespread adoption of ISO 20022, the future standard for international transactions, what can we expect from the cryptocurrency world? For one, it is unlikely that major cryptocurrencies such as Bitcoin (BTC) will be used for conducting cross-border transactions. Not only is Bitcoin built on a proof-or-work consensus, but its transaction time is exceedingly slow compared to other projects in the fintech space. Bitcoin is also not currently an ISO 20022 compliant digital asset.
Of the thousands of cryptocurrencies in existence, the following currently comply with the ISO 20022 standard: (courtesy cryptopolitan.com)
One only needs to visit the ISO 20022 website to dive deeply in the guts of the project. Here, you can explore the many members of the standards committees across the five domains that the standard will address. The business domains are: payments, securities, cards and related retail financial services, foreign exchange, and trade services.
As far as the ISO standard’s syntax, the most widely used is eXtensible Mark-up Language (XML). This is not to be confused with the digital asset minted by Steller, the Lumen (XLM). The reason for using this syntax is simple, it is the most widely used method for encoding documents electronically.
Real Time Gross Settlement processing (RTGS) is speeding up the movement of money. It facilitates the electronic movement of money from bank to bank in seconds, settling out with near immediacy. This enhancement of transaction speed creates new levels of liquidity by freeing up funds that would otherwise be used as nostro/vostro or delayed settlement through old messaging systems, such as SWIFT MT. Follow this link to see a timeline of the adoption for ISO 20022 and RTGS across the globe.
The ISO 20022 project is over a decade old and quickly approaching unilateral adoption across the global monetary system. Referring back to the five business practices gives you a good understanding of the impact that the world of finance will experience in the coming months. While many cryptocurrency projects are left seemingly unaffected, watch for the legal outcome of one particular company engaged in the global payment remittances sector, Ripple. While the US Securities Exchange Commission is trying to convince the legal system that the cryptocurrency XRP was sold as an unregistered security, the digital asset XRP does comply with the ISO 20022 standard and the company Ripple is on the ISO 20022 Payment Standards Evaluation Board as an expert for one of the five business practices: payments.
This is not investment advice. I am not an investment advisor. This is for entertainment and informational purposes. Consult a licensed financial advisor before trading.
You must be logged in to post a comment.