ISO 20022 Cryptos
By Brenden Rearick, InvestorPlace Financial News Writer
The world of institutional global wire transfers and cryptos have long stood at odds with one another. The advent of cryptocurrency threatens to unseat international money wiring as a centralized service. Yet now, thanks to ISO 20022, it seems like these services might be able to coexist and deliver the best of both worlds. But, what are the crypto assets to buy in order to best benefit from this coming standard? Luckily, there are a variety of ISO 20022 cryptos to pick through.
The International Organization of Standardization is behind the creation of the ISO 20022 standard. The organization introduced ISO 20022 as a way to have one standard method of developing messages between financial institutions. Indeed, institutions all over the world use their own different coding languages for these messages, which can make international transfers a very jumbled and disorganized process.
ISO 20022 would consolidate all of these messaging formats into a single language — eXtensbile Markup Language (XML). Many organizations are starting to back ISO 20022. Notably, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) put its support behind the standard in 2018. The organization is migrating its members to the ISO 20022 standard. Earlier this month, the organization rolled out a testing environment for its clients to get a feel for the standard. It plans to have the standard fully implemented by the end of next year.
The U.S. government is helping to greatly expedite the adoption of ISO 20022 as well. The Federal Reserve Board (FSR) is saying now that Federal Reserve Banks will adopt the standard in late 2023. The backing of FSR and SWIFT gives ISO 20022 a significant backing.
Compliant ISO 20022 Cryptos Will See a Boom in 2022 With SWIFT Adoption
The ISO 20022 standard does threaten to get in the way of some cryptos. There are a number of experts who believe adoption of the standard will get in the way of cryptos like Bitcoin (CCC:BTC-USD) and keep them from becoming ubiquitous as international money-transfer plays. However, that’s not the case for a handful of ISO 20022 cryptos; there are five digital currencies that adhere to ISO 20022’s compliance requirements, making them apt plays for the year to come as SWIFT adopts the format.
Two cryptocurrencies are not just compliant with ISO 20022, they are members of the ISO 20022 Standards Body. These currencies are Ripple (CCC:XRP-USD) and Stellar Lumens (CCC:XLM-USD). Ripple is the first of the two to be added to this body, opening up standardization for distributed ledger technology. Stellar is a part of this body through IBM (NYSE:IBM), which uses Stellar to underlie its stablecoin-issuing operation.
Other cryptos that are compliant with ISO 20022 include XDC (CCC:XDC-USD), Iota (CCC:MIOTA-USD) and Algorand (CCC:ALGO-USD). What ties all of these cryptos together — and differentiates them from non-compliant cryptos — is their focus on streamlining international wire transfers. As such, they are some of the earliest adopters of the ISO 20022 standard, seeing that it is rapidly growing in support from institutions. In addition to these five, there are three more cryptos rumored to be compliant. But, these cryptos are not yet officially listed as such. This list includes Hedera Hashgraph (CCC:HBAR-USD), Quant (CCC:QNT-USD) and Cardano (CCC:ADA-USD).