What is ISO 20022? Simply put, it is a standard that allows the financial world to communicate in the same language, and this standard is not only applicable to traditional finance but is also expanding into the encryption currency sector. By standardizing the transmission of financial information, ISO 20022 brings order and interoperability to the encryption industry, allowing for easy communication between different platforms and networks.
So, how does ISO 20022 work? It replaces various complex old protocols with a unified language to simplify processes, reduce costs, and improve data accuracy. Moreover, those cryptocurrencies that integrate ISO 20022 can interface with existing financial channels, being compatible not only with traditional systems but also bringing new efficiencies through blockchain technology.
While approximately 72% of major banks currently comply with ISO 20022, full global adoption is not expected until 2025. Therefore, in reality, cryptocurrencies themselves are not strictly compliant; rather, the networks they belong to will incorporate various terms and information formats of ISO 20022 into their infrastructure to facilitate easier interoperability in the future.
In recent years, as global finance gradually modernizes through ISO 20022, some innovative blockchain projects have also begun to support this standard. This means that encryption currencies will be able to interoperate with external financial information systems in the future.
In this trend, cryptocurrencies like XRP and Stellar have quickly adopted the ISO 20022 format due to their close cooperation with banks, laying the foundation for their integration into existing financial rails and the upgrading payment systems.
Why are ISO 20022 cryptocurrencies so important? They have the potential to bridge the gap between cryptocurrencies and mainstream finance. By adhering to globally recognized inter-institutional data standards, these digital assets open up several key opportunities:
1. **Smooth Integration of Banking Infrastructure**: Compliant encryption currencies can easily interact with existing banking payment rails and clearing technologies, facilitating access to the traditional financial system.
   
2. **Interoperability with Central Bank Digital Currencies**: As major economies such as China and the European Union develop central bank digital currencies, compatibility with ISO 20022 will become crucial. Cryptocurrencies that meet this standard can be prepared for the future.
3. **Possible Integration with the SWIFT System**: Widely adopted by banks globally, integration with SWIFT will significantly enhance the chances of encryption currency being accepted by the mainstream. ISO 20022 compliance brings certain encryption currencies closer to this milestone.
4. **Bridge Between Fiat Currency and the Encryption Economy**: With advanced data sharing, centralized and decentralized currency networks can interact more efficiently, which may rapidly increase the adoption rate of cryptocurrencies.
5. **Key Adoption by Banks and Institutions**: To achieve custody, trading, and widespread use by banks, seamless data functionality is essential. ISO 20022 is the most important industry standard for banks currently.
In the coming years, projects like XRP, Cardano, Quant, and Algorand have begun to integrate ISO 20022 in order to stand out in the global financial network. Some of these projects have already demonstrated advantages such as faster transaction speeds, cost-effective cross-border payments, and smooth integration with traditional financial systems in practical applications. This not only enhances their market competitiveness but also expands compatibility with central bank digital currencies and other financial information systems, preparing for broader adoption.
As the ISO 20022 standard continues to expand, these cryptocurrencies are also at the forefront of it, greatly enhancing their compatibility with traditional financial systems and promoting broader interoperability in the encryption space. The new financial paradigm that integrates blockchain, artificial intelligence, and decentralized network technologies may lead the way for a pioneering smart financial system.
The core objective of ISO 20022 is to modernize the traditional financial sector, making data processing more user-friendly for institutions. This standard could help cryptocurrencies integrate into traditional fields in unprecedented ways. So, what are your insights on the future of ISO 20022 cryptocurrencies? Are there any projects that have caught your attention? Share your thoughts!