ISO 20022 is an international standard for financial messaging. It was developed by the International Organization for Standardization (ISO) and is based on XML (eXtensible Markup Language) messages. Its main goal is to create a common "language" and a standardized data model for the exchange of financial information globally.
What is it for?
* Standardization and interoperability: Allows different financial institutions, payment systems, and market infrastructures to communicate more efficiently and seamlessly, even at a cross-border level.
* Wealth and data structure: Unlike previous standards that had limited information, ISO 20022 allows for many more details to be included in messages (invoice references, order numbers, additional metadata, etc.). This improves transparency and reduces errors.
* Operational efficiency: Standardization and greater data richness reduce the need for manual reconciliations, minimize errors, and streamline transaction processing.
* Flexibility and scalability: It is adaptable and can evolve to support new services, use cases, and requirements, facilitating the integration of new technologies.
* Combats fraud: More structured and detailed information helps in detecting fraud and in complying with anti-money laundering (AML) regulations.
* Drives innovation: By modernizing payment infrastructure, it enables the development of new products and services, such as instant payments or solutions based on emerging technologies.
Many important regions and payment systems, such as the Single Euro Payments Area (SEPA) in Europe and SWIFT (for cross-border payments), are migrating to or already using this standard.
Cryptocurrencies that comply with or align with ISO 20022
It is important to note that ISO 20022 is a messaging standard, not a blockchain technology. However, some cryptocurrencies and blockchain projects have been designed or have sought to align with this standard to facilitate their integration with the traditional financial system and banking institutions.
The most mentioned cryptocurrencies that are considered aligned or "compatible" with ISO 20022, due to their focus on interoperability and financial messaging standards for efficient cross-border transactions, are:
* Ripple (XRP): It is one of the most prominent and focuses on cross-border payments for financial institutions. Ripple is a member of the ISO 20022 standardization body.
* Stellar Lumens (XLM): Similar to XRP, but with a broader focus, including payments between individuals and the development of central bank digital currencies (CBDC). Stellar is also a member of the standardization body.
* Algorand (ALGO): Aims to be a blockchain platform that enables a wide range of financial applications, including those that benefit from data standardization.
* IOTA (MIOTA): Aimed at transactions in the Internet of Things (IoT) and focuses on efficiency and interoperability.
* Hedera Hashgraph (HBAR): A distributed ledger network presented as an alternative to traditional blockchains, seeking high speed and security for enterprise applications and micropayments.
* Quant (QNT): Its main goal is to enable interoperability between different blockchains and financial networks, which naturally aligns it with the need for standards like ISO 20022.
* XDC Network (XDC): A hybrid blockchain designed for global trade and finance, focusing on ease of integration with legacy systems and efficiency in financial operations.
* Cardano (ADA): Although not as directly focused on cross-border payments as XRP or XLM, its modular design and focus on interoperability make it compatible with the idea of integrating into broader financial systems.
The "compatibility" with ISO 20022 in the context of cryptocurrencies often refers to their ability to facilitate the exchange of financial data in a way that can be processed and integrated by systems using this standard. This positions them for potential institutional adoption and greater integration with traditional financial systems.