Hedera (HBAR), Stellar (XLM), and Cardano (ADA) are gearing up for a trillion-dollar market with ISO 20022 compliance. The ISO 20022 standard is set to replace SWIFT, the long-standing financial messaging protocol that has been used by industry players for the past five decades. Crypto networks such as Hedera, Cardano, Ripple, and Stellar are already working towards becoming ISO 20022 compliant.
The adoption of ISO 20022 marks a significant milestone in the financial industry, as it will enhance communication between financial institutions, making transfers more accessible, faster, and cheaper. Additionally, it will promote interoperability among players in different regions with varying technological infrastructures.
The new standard is not only focused on improving efficiency but also on combating digital crimes in the era of artificial intelligence and quantum computing. It will enable users to better detect fraud, ensure compliance, and manage liquidity effectively.
For the crypto industry, achieving ISO 20022 compliance is crucial. When SWIFT was established, blockchain and cryptocurrencies did not exist, making it difficult for them to penetrate the traditional financial system. However, with ISO 20022, crypto networks and tokens can seamlessly integrate into centralized financial systems once they are assigned ISO codes. This integration has the potential to transform both the crypto industry and the legacy banking sector.
The deadline for implementing ISO 20022 is set for 2025, and many cryptocurrencies are preparing for this transformation. Currently, the compliant cryptocurrencies include Stellar, Cardano, Ripple, Quant, Verge, Algorand, Hedera, IOTA, and XDC.
For virtual asset service providers (VASPs) aiming for ISO 20022 compliance, there are several key requirements. These include complying with local and regional regulations, implementing adequate anti-money laundering (AML) and know-your-customer (KYC) checks, ensuring data security measures, and establishing a well-documented governance and support structure.
In addition, VASPs must educate their clients about the impact of migrating from SWIFT to ISO 20022 and allocate sufficient resources for training their staff on the new ISO standards.
However, one drawback of becoming ISO 20022-compliant is that it moves cryptocurrencies further away from the perceived decentralized nature that crypto purists advocate for. With the new standard, crypto will become part of the centralized global financial system.
As the implementation of ISO 20022 draws closer, the crypto industry is positioning itself to play a significant role in the trillion-dollar market. The compliance with ISO 20022 standards will not only bring greater efficiency and interoperability but also open doors for widespread adoption of cryptocurrencies in the traditional financial system.
