The Cryptos to Unlock SWIFT

• XRP, XLM, and IOTA are three cryptos with ready-to-use technology for payments.
• The technological advance has positioned these coins as the favorites to harness SWIFT in new markets.

Ripple and its native coin XRP, Stellar Lumens (XLM), and IOTA have all unlocked the ability to integrate with SWIFT, the global financial messaging network that facilitates international transactions for banks. This achievement puts these cryptocurrencies in a position within the industry with the potential to disrupt traditional banking systems and offers faster, cheaper, and more efficient alternative transaction methods.

Likewise, these digital currencies have formed partnerships with major players in the industry, including banks and financial institutions, which has helped to further boost their credibility and adoption. As a result, they are now well-positioned to compete against traditional banking systems and drive innovation in the financial industry.

Ripple, IOTA, and Stellar Partner SWIFT Under ISO 20022 Regulation

Recall that in April it was announced that Ripple, IOTA, and Stellar Lumen are in line to work with SWIFT under the ISO 20022 regulation; a single standardization approach meant to be used by all financial standards initiatives.

Ripple has been  part of the standard body since May 2020.

We talk a lot about interoperability in the world of cross-border payments. But what does it actually mean in practice?@ToShriyanka, Head of Market Infrastructure Communities and Standards Services at Swift, sat down with @Finextra to unpack this topic and explain why… pic.twitter.com/qSD7oZF6xk

— Swift (@swiftcommunity) May 11, 2023

Of the three, Ripple’s XRP has had the most success in its efforts to partner with traditional financial institutions. Its technology allows for real-time settlement of cross-border payments, offering a much faster and more cost-effective alternative to traditional methods.

Earlier this month, Ripple and XRP announced a massive push into the billion-dollar Dubai and Middle East and North Africa (MENA) markets, signaling its determination to succeed as a foremost blockchain payments firm.

Stellar’s XLM takes a slightly different approach, positioning itself as a platform for decentralized financial services. It aims to provide banking services to the unbanked and underbanked population in developing countries, offering low-cost financial transactions through its network.

Stellar has already partnered with IBM to develop blockchain-based solutions for the global financial industry, further cementing its position as a potential disruptor.

IOTA, on the other hand, offers a unique solution to the problem of scalability within blockchain technology. Its protocol allows for secure, feeless transactions between devices on the Internet of Things (IoT) paving the way for a new era of machine-to-machine transactions. 

Overall, as these three cryptocurrencies continue to gain traction and secure partnerships with major players in the financial industry, it will be interesting to see how they reshape the landscape of finance in the years to come.

ISO 20022 Reshape the Trade Finance Ecosystem

The majority of cross-border payment traffic is attributed to open account trade. Implementing the ISO 20022 standard for payments will indirectly benefit trade as well. 

While banks and corporates are currently transitioning to generating and processing ISO 20022 messages for payments, this change will also impact the trade finance ecosystem. This will immediately affect the payment and reconciliation processes for different trades between importers and exporters.

Adopting the ISO 20022 standard for payments creates a universal language worldwide and blockchain firms are doing all they can to leverage this allowance. 

This standardization, alongside the benefits of blockchain technology, will allow for more efficient end-to-end payment and trade finance flow, reduce costs, and streamline letter of credit and guarantee processes. Additionally, shifting towards paperless transaction processing will speed up document discrepancy handling.

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