Can XRP make inroads into traditional finance as ISO 20022 standard is officially adopted?
In recent news, the ISO 20022 messaging standard has officially gone live across major financial networks, sparking discussions about XRP’s potential role in traditional finance. As banks adopt this new shared messaging format, questions arise about how they may integrate blockchain systems and if XRP could be part of this process.
Market commentators have highlighted that the shift to ISO 20022 does not directly impact how digital assets like XRP move but rather changes how banks exchange payment data. Supporters of XRP have emphasized its utility as a bridge between different systems, particularly as the need for settlement assets increases with the introduction of new stablecoins and real-world assets on networks.
Community members have likened the ISO 20022 update to two people speaking different languages agreeing on a shared language for better understanding. The structured messaging format adopted by banks aids in uniform information processing, but it does not mandate the use of XRP for transactions. Digital assets continue to operate on their respective networks, independent of ISO rules.
Despite not being part of the SWIFT network’s messaging layer, XRP could potentially align with blockchain systems as banks migrate to ISO 20022. Linking to platforms like Ripplenet may become more straightforward with the new messaging standard, presenting opportunities for XRP to facilitate lower friction and faster settlements in certain transactions.
An illustration was provided to illustrate how banks could utilize XRP for value transfer between different currencies. By converting one currency into XRP and then into another, institutions could potentially streamline cross-border transactions. However, the practical adoption of this method would depend on individual bank preferences, taking into account factors such as cost, speed, and regulatory compliance.
Despite the hype surrounding ISO 20022’s launch, the market reaction to XRP remained largely unchanged, with the price holding steady at around $1.93. Data indicated a minor decrease in trading volume, reflecting a cautious response from investors. Market analysts noted that the new messaging standard primarily addresses information exchange rather than asset pricing, highlighting that banks are not mandated to use XRP for settlements.
In conclusion, while the ISO 20022 update signifies a significant milestone in financial messaging, its implementation does not directly translate to increased demand for XRP. The standard may pave the way for improved interoperability with blockchain systems, but real adoption of digital assets like XRP in traditional finance will require compelling reasons beyond technical compatibility.
