- Ripple, IOTA, and Stellar Lumen are in line to work hand in hand with SWIFT under ISO 20022.
- SWIFT has announced that it is migrating to the system from March 2023 to November 2025.
Ripple, IOTA, and Stellar Lumen are reportedly in line to work with SWIFT under the ISO 20022 regulation. ISO 20022 is a single standardization approach meant to be used by all financial standards initiatives. In other words, it enables interoperability between market structures, financial institutions, and banks’ customers. SWIFT has announced that customers would be at different stages of their ISO 20022 adoption journey from March 2023 to November 2025. In addition to SWIFT, market infrastructures such as The Clearing House, the Federal Reserve, the Bank of England, and the Nigeria Interbank Settlement System (NIBSS) have all declared their plans to migrate to ISO 20022 between 2022 and 2025.
Ripple announced that it has become part of the Standard body in May 2020. Distributed Ledger Technologies (DLT) could reduce the cost of transactions and speed up transaction processes since it removes middlemen from processes. The decision by SWIFT to migrate to ISO 20022 is to replicate this for its member institutions.
Ripples ISO 20022 membership will allow customers to utilize RippleNet to access a network of global financial institutions and connect to one standardized API for all counterparty connections. By adhering to the ISO 20022 standard further validation is provided to show the potential of DLT in the world of traditional finance and payments as all financial institutions will by 2022 have to comply with the same payments standard/mandate.
Ripple has a technical edge over SWIFT
Several factors including unstructured data demanding several manual interventions and closed networks have largely affected the objectives of cross-border payments to cut down costs, protect customer data, and provide cost-effective and fast payment services for customers. Because most SWIFT member institutions have Core Banking Infrastructures built on multiple legacy systems, changing their operation to meet the new payment standards has become costly.
For Ripple, its RippleNet platform is already compatible with cross-border payments and enables users to instantly access their money. In addition to lower costs, transactions are settled in as little as four seconds. It is argued that DLT companies such as Ripple have an edge as their technological innovation already addresses the challenges of cost and speed.
The membership to ISO 20022 can only yield positive results for Ripple as this could also mean Ripple can now provide their RippleNet platform at a greater scale by conforming to the same standard that will be used by SWIFT and its member institutions – the institution’s backend internal systems for example for Embargo/Sanctions, Disposition, Bookings, Fraud, Limits, etc an now easily interface into RippleNet as the message standard and structure will be similar and based on ISO 20022.
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U.S. Federal Reserve is also reported to have plans to move into the ISO 20022 system by November 2023. XDC, ALGO, HBAR, QNT, MIOTA, and ADA are all rumored to be compliant with ISO 20022. Currency codes are said to have been developed for fiats under ISO 4217. However, cryptos do not have official codes. They use unofficial ISO codes.
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