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The financial world is gearing up to move to ISO20022, and this is essential for the XRP and Ripple ecosystem. Many in the XRP community are looking forward to this event, but in the meantime, there is a lot of confusion regarding this standard and cryptocurrency.
Matt Hamilton, the developer of the RippleX team, recently commented on some points for his followers on his Twitter.
ISO20022. There is a lot of confusion about this standard for financial industry messaging. In the cryptocurrency space, a lot of people refer to “ISO20022 compliant cryptocurrencies”. This is a non-sequitur. ISO20022 does not define cryptocurrencies, it is related to messages 1/
— Matt Hamilton (@HammerToe) January 8, 2022
“In the cryptocurrency space, many people refer to ‘ISO20022-compliant cryptocurrencies.’ It is not the same. ISO20022 doesn’t define cryptocurrencies, it’s messaging. “
“In fact, ISO20022 doesn’t even define messages. It defines a set of processes and standards for defining messages. So, for example, it does not say: “The payment message must have an amount field defined as follows.” It says, “The message should spell out the fields it wants, like this.”
“So you have messages that are ISO20022 compliant, in the sense that they correspond * to how * they were defined and phrased, but not what actually defines the message itself.”
As Hamilton notes, financial software like RippleNet is written with these types of message standards in mind. With payment systems like SEPA, ACH, RippleNet, etc. that currently use or accept ISO20022 compliant messages, they can communicate with each other more easily.
How does this relate to cryptocurrency? When all financial systems around the world “speak the same language” means that it will be easier for them to exchange data with each other. The next step will be to create more global currencies, and this is where cryptocurrencies come to the rescue.
“So, to summarize, there is no such thing as“ ISO20022 compliant cryptocurrency, ”but there are financial systems (some created by crypto companies like Ripple) that use ISO20022 compliant messages to communicate. Some of them use cryptocurrencies (like XRP) to transfer value. “
As we noted earlier in our articles, many people really confuse concepts such as XRP, XRP Ledger, Ripple and RippleNet, replace one with another, or use them as equals, but this is not correct. As Hamilton notes:
“The problem is that ‘reduction’ is misunderstood. People think XRP is superior in some way * because * it is “ISO20022 compliant.”
Meanwhile, it is Ripple that is a member of the ISO20022 DLT Implementation Committee.
When asked by one user, “Do you believe this will somehow help the XRP price surpass double digits in the next 12 months or so?” Hamilton says:
“Who knows. I don’t like making price predictions. But the adoption of ISO20022 will allow for more interoperable payment systems, and the next logical step will be the use of transnational currencies such as cryptocurrencies. “
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