ISO 20022... is so on

The International Organization for Standardization, or ISO, stands as a titan in the realm of global commerce, nestled in the heart of Geneva, Switzerland. A non-governmental entity, it crafts the universal standards that shape the industrial and commercial landscape, wielding influence that cascades across nations and industries. When ISO sets forth a standard, it doesn’t merely float on the tides of consensus; it becomes an anchor for nearly every financial institution on the planet. In this grand tapestry of trade and finance, the establishment of an ISO code for Bitcoin (BTC) isn't just a formality—it could be the crowning catalyst, propelling cryptocurrency into the mainstream like never before.

Traditionally, ISO has turned a blind eye to the burgeoning world of cryptocurrencies. That stance has begun to shift with the rise of Central Bank Digital Currencies (CBDCs), which have stirred the financial waters and captured the attention of regulatory bodies. At present, the ISO 4217 standard reigns supreme, its codes serving as the lifeline for global transactions. But that is not going to last much longer. Take, for instance, the US Dollar, elegantly represented by the code “USD.” This structure provides clarity and consistency in an otherwise chaotic financial landscape. But, then there is Bitcoin.

Yet, in the sprawling universe of cryptocurrency, a notable void echoes—a lack of official ISO codes. As a workaround, cryptos have adopted unofficial identifiers, with Bitcoin tagging along as “XBT.” It serves as a reminder of the innovative spirit that birthed these digital assets, but it isn’t enough to usher them into the fold of mainstream finance.

Herein lies the tantalizing prospect of the emerging ISO 20022 standard. This framework possesses the potential to bridge the gap, offering a pathway for cryptocurrencies to earn their rightful place among officially recognized currencies—if they can align themselves with the principles of ISO 20022. Should that happen, we might witness a seismic shift as centralized banks begin to embrace crypto, energizing cross-border crypto payments through established financial institutions.

In the junction of innovation and standardization, the future of cryptocurrency hangs in the balance, waiting for that pivotal moment when the gates of mainstream adoption swing wide open. Only time will tell if Bitcoin will don the coat of legitimacy that an ISO code would bestow, but the potential is clear: with the right standards, we might just witness a revolution in how the world perceives and utilizes digital currency.

The purpose of ISO standards is to help create the gatekeepers of global trade. The International Organization for Standardization, ISO, stands as a formidable guardian of quality and safety, tirelessly working to cultivate international trade. Through its bevy of standards—over 20,000 and counting—ISO not only cultivates excellence but also protects end users, ensuring the products that flourish in the marketplace meet stringent parameters of acceptability. With reach spanning 97 diverse fields, including healthcare, agriculture, engineering, and even the complex world of weaponry, ISO acts as the silent architect of global commerce.

Consider the realm of finance: ISO is not merely an afterthought here; it is a cornerstone. When we speak of ISO, we often refer to products that have been meticulously crafted in adherence to certain standards—enter the ISO 4210 standard, for bicycles. Should a merchant wish to import a bicycle into the United States, they would be wise to classify it according to this ISO code or face potential rejection at the port. Such is the weight of ISO's influence over trade.

In the crypto world ISO 20022 is the new dawn for crypto. Now, as we peer into the horizon, we see the flicker of transformation that ISO 20022 promises for the world of cryptocurrency. Imagine a crypto that aligns itself with this standard—its entryway into the world of centralized banking suddenly opens, facilitating payments in a way that merges traditional finance with the digital age. An official ISO code for Bitcoin or Ether could herald a revolution, allowing these cryptos to step into the databases of titans like Visa and MasterCard.

For a historical perspective on currency codes we must review the annals of financial history. ISO has carved its niche through the ISO 4217 standard, established back in 1978 to streamline global bank payments and stock exchanges. Each currency earns its representation by three letters—think "USD" for the US Dollar and "EUR" for Euros—thus minimizing errors and maximizing clarity in international transactions. When a user facilitates a transfer, they do so under the guiding light of ISO’s conventions, ensuring smooth sailing across financial waters.

But what about cryptocurrencies? They remain on the fringes, subsisting on unofficial codes like “XBT” for Bitcoin, a placeholder rather than a hallmark of legitimacy. Herein lies a conundrum: many crypto identifiers conflict with existing ISO 4217 codes. For instance, while “XBT” denotes Bitcoin, it collides with Bhutan’s official currency code “BT.” Such complications highlight the urgent need for NFT (Non-Fungible Token), DTI (Digital Token Identifier) frameworks.

Through the advent of Bitcoin and other crypto currencies the arrival of digital token identifiers has become paramount to our global decentralized blockchain digital monetary transition. ISO recognized this gap, heralding the age of Digital Token Identifiers (DTIs). These unique identifiers are critical for creating harmony within the realm of digital currencies. With ISO 24165-1:2021, an avenue has been paved for token creators to assign fixed-length identifiers for their creations, bringing order to the chaos of digital transactions.

The advent of ISO 20022 is taking things a step further and transforming communication in finance. As we look further down the timeline, ISO 20022 emerges not as a mere standard but as a game-changer for financial communication worldwide. This standard is set to revolutionize the way global payment systems operate. With Europe transitioning by the end of 2022 and the United States following suit in 2023, cryptocurrencies equipped to synchronize their blockchains with this new standard may not only witness an upward shift in their valuation but may also secure their seats at the table of institutional acceptance.

January 1, 2025 is the opening to the road to ISO compliance for cryptos. All global banking will be transitioning to this new compliance. Indeed, the journey to ISO compliance is an arduous one, demanding that cryptocurrencies meet SWIFT's stringent communication requirements. This isn’t merely a procedural hurdle; this endeavor is about enhancing the safety and efficacy of crypto transactions. As of now, Ripple’s XRP and Stellar Lumens’ XLM stand as beacons of compliance within this newly structured financial ecosystem. Ripple, positioned as a formidable player in the fintech landscape, exemplifies speed and cost efficiency in transactions, with XRP boasting settlement times of mere seconds.

ISO serves as a catalyst for adoption of cryptocurrencies into mainstream finance. Through compliance some cryptos will rise to the top of the frey. The short list of ISO 20022 compliant cryptocurrencies in 2024:

• XRP (XRP)

• Cardano (ADA)

• Quant (QNT)

• Algorand (ALGO)

• Stellar (XLM)

• Hedera HashGraph (HBAR)

• IOTA (MIOTA)

• XDC Network (XDC)

ISO emerges as the architect of international standards, wielding the power to influence not just trade but the very fabric that weaves our financial systems together. As the Swiss based non-governmental organization continues to navigate the tides of innovation and regulation, digital currencies await their moment in the sun, ready to step into the limelight with the backing of recognized identifiers. With Ripple leading the charge and others poised for entry, the path forward is clear—an embrace of ISO compliance could well be the lifeline that cryptocurrencies need to truly integrate into the heart of mainstream finance.

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NOTE FROM THE AUTHOR: I would like to know if you are invested in crypto. What has been your crypto experience or interest since the creation of Bitcoin in 2008. What do you enjoy so far with my deep dive into this new financial world that is changing the way we live right out from under us?

I welcome your participation and look forward to hearing from you!

Check out my book “Quantum of Justice” for more deep dive into securitization and the trail of fraud left behind by Wall Street!