- Ripple is ISO 20022 compliant, a move many say will benefit XRP.
- As a cross-border enabler, Ripple’s success can translate to XRP’s growth.
Market participants believe Ripple’s adoption of ISO 20022 could open the way for XRP’s integration into traditional payment systems. While XRP and ISO 20022 are unrelated, Ripple’s compliance with this industry standard for financial messaging may benefit the coin.
Ripple’s Connection With ISO 20022
ISO 20022 is a flexible framework that allows users and message development organizations to define information according to an internationally agreed-upon approach. This standard provides a structured and data-rich common language readily exchanged among corporations and banking systems.
This standard, developed by the International Organization for Standardization (ISO), also provides the opportunity for enhanced analytics. This can lead to offering valuable new levels of payment services to financial institutions�?customers.
Approximately 72% of institutions connected to the SWIFT network anticipate switching to ISO 20022 by November 2025. Additionally, over 70 countries, including Switzerland, China, India, and Japan, anticipate adopting ISO 20022 into their payment systems, according to a CNF report. The messaging system is set for smooth harmonization and efficiency in cross-border transactions.
SWIFT, which handles a substantial share of cross-border payments, is leading the transition from its earlier messaging system (MT) to ISO 20022. The move aims to standardize financial communications and streamline payment processes, allowing financial institutions to operate globally.
Ripple, a key player in blockchain-based payments, joined the standards body in 2020. Ripple’s participation allows its payment network, RippleNet, to integrate with other ISO 20022-compliant institutions. This compliance makes it easier for RippleNet to conduct cross-border transactions through a unified Application Programming Interface (API).
The company’s involvement with ISO 20022 has raised discussions about how it might impact XRP. The token does not comply with the messaging standard despite Ripple’s adherence to ISO 20022. Some crypto community members claim XRP complies with ISO 20022 due to Ripple’s participation in the standard.
Ripple’s Chief Technology Officer, David Schwartz, recently refuted this claim, emphasizing that the token has nothing to do with ISO 20022. He argues that ISO 20022 is a messaging standard, while XRP functions entirely as a cryptocurrency.
Possible Benefits for XRP
Although XRP is not directly compliant with the messaging standard, it can still benefit from Ripple’s alignment with the framework. Ripple’s compliance may facilitate XRP’s integration into established banking institutions.
For instance, Ripple’s payment solutions, especially On-Demand Liquidity (ODL), may gain more popularity as financial institutions switch to ISO 20022. ODL allows faster, cost-effective cross-border settlements using XRP as a bridge asset between different fiat currencies. XRP’s faster transaction speed could entice financial institutions seeking efficient cross-border payment options to adopt the token.
Furthermore, Ripple’s involvement with ISO 20022 may create new opportunities for XRP to be integrated into the wider financial ecosystem. Overall, this might impact the price of the coin, up 1.25% as of writing to $0.5389.
