Reasons why ISO 20022 compliant coins will change the future of FinTech

The “common language” of the financial system is rapidly spreading.

As SWIFT shifts from the MT standard to ISO 20022, the blockchain industry is also trying to ride the same wave. What is ISO 20022? Simply put, it is a set of rules for banks, payment systems, and applications to “speak the same language.”

This international standard is a financial message format established by the International Organization for Standardization (ISO) in 1947. It has become a common rule for all financial transactions, including payments, securities trading, trade services, and foreign exchange.

Why are ISO 20022 compliant coins attracting attention?

Unlike the traditional SWIFT MT standard, ISO 20022 messages can include more data in XML format. Recipient details, remittance notes, and compliance checks are all integrated into a single message.

Specific Benefits:

• Interoperability: Blockchain assets are directly connected to existing banking infrastructure. Tokens move seamlessly between banks and blockchain.
• Regulatory Compliance: KYC/AML (Know Your Customer/Anti-Money Laundering) is automated. Audits become overwhelmingly faster.
• Scalability: The rich message format supports complex smart contracts. Cross-border transactions are also easy.
• Institutional Investor Trust: Banks and major payment providers determine that “ISO compliance = safety.” This opens the way for capital inflows.

Which ISO 20022 Compatible Coins Are Promising?

XRP: Characterized by fast transaction speeds and low fees. Already compatible with the ISO 20022 format.

XLM (Stellar): Open-source type. A structure that allows for rich data to be incorporated with each transaction. Optimized for banks and institutions.

Algorand (ALGO): Specializes in processing speed and security. Capable of handling large transaction volumes, with strengths in cross-border payments.

Hedera Hashgraph (HBAR): Supported by a council composed of global enterprises. Achieves both speed and security with its unique consensus algorithm.

R3 Corda (CORDA): An enterprise blockchain, not a public blockchain. Widely adopts ISO 20022 schema.

In the future, the integration of IOTA and RippleNet, as well as the対応 of various countries' CBDCs (Central Bank Digital Currencies), is also planned.

Implementation Challenges: Not Easy

It seems like a dream story, but reality is complicated.

• High implementation cost: Significant system reconstruction is required. Time, funds, and advanced technical skills are essential.
• Version Splits: Different countries adopt different versions. There is a possibility of gaps arising between networks.
• Hard fork required: A large-scale upgrade is necessary for the new standard. User backlash is also expected.
• The evolution of standards never stops: ISO 20022 is also continuously updated. We must always catch up.

Future Outlook: The Integration of TradFi and DeFi Becomes a Reality

As CBDCs rapidly spread and central banks begin to collaborate using ISO 20022, the ratings of blockchain assets will change dramatically.

A time will come when physical assets such as stocks, real estate, and gold are tokenized and circulated on ISO-compliant blockchains. Liquidity between platforms will dramatically improve, and smart contracts will be able to accommodate more complex and automated trading rules.

What Investors Should Know

Coins compatible with ISO 20022 are no longer just an option, but are becoming inevitable. Existing projects like XRP and XLM have already adapted. New projects are also continuously entering the market.

It is certain that this standard will form the backbone of the global financial system. Selecting the right coins and holding them for the long term is an effective investment strategy to ride the wave of the digital financial era.