• Ripple, IOTA and Stellar Lumen are reportedly in line to work with SWIFT under the ISO 20022 regulation.
• SWIFT has announced that customers would be at different stages of their ISO 20022 adoption journey from March 2023 to November 2025.
• Ripple’s ISO 20022 membership will allow customers to utilize RippleNet to access a network of global financial institutions and connect to one standardized API for all counterparty connections.
SWIFT Migration To ISO 20022
SWIFT has announced that it is migrating to the system from March 2023 to November 2025. This single standardization approach, called ISO 20022, is meant to enable interoperability between market structures, financial institutions, and banks‘ customers. In addition to SWIFT, other infrastructures such as The Clearing House, Federal Reserve, Bank of England and Nigeria Interbank Settlement System (NIBSS) have also declared their plans for migration by 2022-2025.
Ripple has become part of the Standard body in May 2020. Distributed Ledger Technologies (DLT) could reduce the cost of transactions and speed up transaction processes since it removes middlemen from processes. The decision by SWIFT to migrate to ISO 20022 is intended to replicate this for its member institutions. With Ripple’s involvement in the Standard body, customer can now use RippleNet platform which enables them access their money instantly with lower costs. Transactions are settled in as little as four seconds using this technology.
Benefits Of DLT Technology On Traditional Finance And Payments
The use of DLT technology on traditional finance and payments offers several benefits including reduced costs cutting down manual interventions such as unstructured data; protection of customer data; cost-effective and faster payment services for customers etc. As many SWIFT member institutions have Core Banking Infrastructure built on multiple legacy systems making changing operations difficult with high costs; DLT technology offers an alternative solution which helps them achieve same objectives affordably without compromising customer experience or quality standards set by regulatory bodies across different countries..
Ripple’s Edge Over Swift
RippleNet’s compatibility with cross-border payments allows it edge over SWIFT as it enables users settle transactions faster while reducing associated costs due manual interventions needed when using some traditional banking infrastructure supported by legacy systems like those used by most Swift member institutions..
Ripple’s adherence to the ISO 2002 payment standard provides further validation on potentials of DLT in world of traditional finance and payments as all financial institutions will have no choice but comply with same payment standards/mandate before 2022 deadline set by regulatory bodies across different countries ends..