- ISO standards are global regulations and standards published and approved by The International Organization for Standardization (ISO) to ensure safety, security and efficiency of digital payments.
- The implementation of ISO 20022 will entirely transform the landscape of the banking and financial institutions to facilitate and improve the global payments.
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ISO 20022 is all set to be launched this week. With these global standards launching in the following week, there is much speculation that these new regulations will bring about radical changes in the crypto industry. Enthusiasts and experts are also anticipating the crypto prices might witness a hike once the ISO 20022 standards are implemented.
Read on to know more about the details of ISO 20022 and its implications and a list of ISO compliant digital tokens and currencies.
What is ISO 20022 and why does it matter?
ISO 20022 is a set of international standards that will ensure that digital transactions are compliant with the global laws and regulations. This international protocol defines a standard and secure procedure of exchanging electronic messages between financial institutions. The new ISO 20022 will replace the SWIFT financial messaging system which has been in the financial sector for more than 50 years now. The system is much faster than the conventional legal formats used by financial sectors as it offers a faster processing rate and provides access to larger data volumes.
These new standards also meet the constantly evolving demands and requirements of financial institutions and organizations, by allowing them to develop a single and globally recognized messaging language. This mode of communication enables businesses to connect and collaborate with their potential clients and partners on a unified platform.
The ISO 20022 standard is advantageous to financial institutions like banks, cryptocurrency businesses, and stock brokers. It facilitates effective communication across many departments and organizations while lowering the costs related to various communication methods. Moreover, ISO 20022 is a great option for any organization providing financial services because it manages to achieve interoperability between already-existing protocols while being able to accommodate a variety of financial activities.
In order to keep up with the increasing competition and technological advances, it would be best for financial institutions around the world to keep up with these new standards. All in all, ISO 20022 offers an opportunity for businesses looking to keep ahead of their competitors in terms of technology.
Essential factors to consider for switching to ISO 20022
Here are some of the crucial considerations that you should take into account before making a switch to ISO 20022:
- Payment infrastructure including hardware and software features should be ready to incorporate ISO 20022.
- Businesses should also comply with crucial regulatory demands such as anti-money laundering laws.
- Systems should be secure and well-equipped to protect customer data.
Businesses should also consider the cost and strategic advantages of implementing ISO 20022.
- Organizations should educate their customers about the regulations, benefits and risks associated with ISO 20022.
- Organizations should also be equipped with adequate governance and support to manage ISO 20022.
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What are the benefits of complying with ISO 20022 standards?
Here are some of the positive aspects of complying with the ISO 20022 standards:
- Higher visibility about your potential customers and investors
- Robust security measures for digital transactions
- Enhanced liquidity to facilitate transactions operations
- Mitigates challenges of scams and risks of fraudulent activities
List of Cryptocurrencies that are ISO 20022 Compliant
The new regulations have influenced both the fiat and digital currencies to be recognised as legitimate currencies. Here is a list of eight currencies that have complied with the ISO 20022 regulations:
Ripple (XRP): Ripple (XRP) is not only one of the most popular cryptocurrencies in the market but it is also one of the biggest ISO 20022 compliant cryptos today. Moreover, it can process over 1500 transactions per second.
Stellar Lumens (XLM): Stellar Lumens is also approved by the ISO 20022 which can expedite cross-currency conversions for its consumers rather than institutions. Despite a sluggish transaction processing time, it can process around 3000 transactions.
Iota (MIOTA): It is a blockchain-based platform that allows consumers to efficiently execute financial transactions using different assets. Since the platform is also compliant with the ISO 20022 standard, it is safe to use it.
XinFin (XDC): It is also a blockchain-based protocol which is certified by ISOS 20022 that facilitates transactions using XDC tokens.
Hedger Hashgraph (HBAR): The platform works as a distributed ledger platform which is designed to prevent a variety of the limitations of conventional blockchains. The processing power of HBAR might reach upto 10,000 transactions per second without compromising on its robust security.
Cardano (ADA): ADA is the digital currency of a third-gen blockchain platform called Cardano which has the 7th largest market cap in the crypto industry.
Algorand (ALGO): Another ISO compliant proof-of-stake distributed ledger blockchain technology has to be ALGO.
Quant (QNT): This powerful over-ledger might bring about revolutionary shifts in the financial sector as it aims to establish a seamless communication between different ISO 20022 networks.
Ripple and ISO 20022
Despite the ongoing lawsuit between SEC vs Ripple, Ripple is one of the key financial players of the ISO 20022 and a part of “Registration Management Group” which helped to develop these regulations. According to Ripple’s vice president, the company is already in compliance with the international standards of ISO 20022 and will be one of the first ever crypto businesses to implement the new global financial standard.
The innovative features and regulations of ISO 20022 are all set to revolutionize the entire crypto industry and conventional financial institutions. It is anticipated that the new technology will transform the payment operations by introducing instant, data-rich and high-value transactions. Initially, it could get challenging for businesses and organizations to make quick transitions to the legal changes and new standards due to payment infrastructure upgrades and cost of implementation. However, it would be best for businesses to make the switch instantly and take advantage of the potential opportunities the international protocol offers to stay ahead of competition.
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