In the cryptocurrency sector, there is much talk about the ISO 20022 financial messaging standard, a standard that directly affects them by applying advantages and disadvantages to their proper use as a financial technology, and not as investment instruments. With the rapid evolution of the cryptocurrency market, it is important to stay up-to-date on the most current trends, and ISO 20022 is undoubtedly one of them.
In broad terms, ISO 20022 is a global standard for the communication of financial transactions developed by the International Organization for Standardization (ISO). It is used by banks, companies, and other financial institutions to exchange information about transactions efficiently and securely.
This standard provides a common framework for transmitting financial information, including details such as:
The type of transaction
The amount
The date
The sender
The recipient
This enables greater interoperability between different systems and platforms, making financial transactions more straightforward.
ISO 20022 and cryptocurrencies
In the crypto sector, ISO 20022 will help improve the efficiency and security of transactions by providing a standardized framework for financial communication. This will allow for greater interoperability between different networks and services in the case of cryptocurrencies. It means that users can transfer cryptocurrencies from one platform to another or even between different currencies more easily and without hiccups, enabling cryptocurrency service providers to meet regulatory requirements more efficiently.
Interoperability and transparency are improvements that any new standard should aim to achieve, regardless of the application of that standard. Additionally, providing a standardized framework allows regulators to collect and analyze data on cryptocurrency transactions, preventing money laundering, fraud, and other illegal activities that are often associated with cryptocurrencies. So far, the list of cryptocurrencies that comply with ISO 20022 is growing. Among the cryptocurrencies on the list, we can observe: Stellar (XLM), Hedera (HBAR), IOTA (MIOTA), Red XDC (XDC), Ripple (XRP), Algorand (ALGO), and Quant (QNT). The fact that these cryptocurrencies have been developed to facilitate global transactions makes it possible for them to be listed and comply with the standard more easily.
Little by little this new system is becoming more and more accepted and recognized, creating countless opportunities in the near future. It is becoming the most common form of global currency exchange for any type of currency, including cryptocurrencies. Without a doubt, ISO 20022 is a significant standard that will become increasingly necessary, as many investors favor cryptocurrencies complying with this standard. By integrating into the central banking system, cryptocurrencies can offer the regulatory and security environment that many institutional investors demand to be more active in this sector.
Cryptocurrencies conforming to the ISO 20022 standard will form the backbone of the New World Financial System, replacing the 50-year-old SWIFT payment system with a new financial payment system based on blockchain.
Conclusion
The cryptocurrencies complying with the ISO 20022 standard will form the backbone of the New World Financial System, replacing the SWIFT payment system with a new blockchain-based financial payment system. Additionally, these compliant cryptocurrencies have the potential to revolutionize the financial landscape by becoming an attractive option for both consumers and institutions alike. The future holds exciting possibilities as this standard continues to shape the evolution of the cryptocurrency market.
It is not yet certain when SWIFT (currently the largest international payment system) will definitively implement the ISO 20022 standard without friction with cryptocurrencies. However, it is obvious that the internet needs functional systems to continue building a more operational network at all levels, taking payment management to a global level, supporting multiple currencies, and operating at very low costs. The integration is not easy and is being done under secure environments for development, implementation, and testing. Cryptocurrencies must be integrated into existing payment systems compatible with the standard through Application Programming Interfaces (APIs) that allow smooth communication between the digital asset and the payment system. Once integrated, cryptocurrencies compliant with the ISO 20022 standard can be used for various financial activities, such as cross-border payments, remittances, and commercial operations.