Old coins are skyrocketing and can't be stopped? Maybe you should understand the underlying ISO 20022

2024-12-09 10:23:13

Collection

ISO 20022, the universal language of the financial industry.

Author: Deep Tide TechFlow

This round of the bull market has risen to a point that feels a bit uncomfortable. Just after being awarded the title of "Meme Bull Market," the market has once again erupted in a chorus of wails—yes, the old players who chased after memes have been trapped again. The most painful part is not being trapped by chasing memes, but rather selling off long-held, stagnant old coins to chase memes, only to see those old coins start to surge wildly.

XRP, XLM, HBAR, XVG… Recently, the names appearing on the exchange's gainers list every day are familiar yet strange to the old investors. In less than a month, XRP has skyrocketed by 400%, surpassing SOL in market capitalization, and old group friends are all exclaiming: What year is it today?

The "old junk" that has been subjected to FUD suddenly surged against the norm. While it may seem like a rotation of sectors, at its essence, it might still be the market's "value discovery" of these assets once again.

The positive impact of Trump's victory on cryptocurrency goes without saying, as evidenced by Bitcoin's insane rise. Just one month after the election, Bitcoin successfully broke through the $100,000 mark. Trump's repeated friendly statements towards crypto have also led Wall Street to reassess the broader "payment attributes" of cryptocurrencies. For example, the recent surges in XRP, XLM, etc., are not only mostly linked to the payment sector but also share a commonality: they belong to the "ISO 20022" concept.

ISO 20022, the Universal Language of Finance

Is ISO 20022 a new narrative that has suddenly emerged? Not at all; in fact, ISO 20022 took shape as early as 2004, long before the first Bitcoin was mined.

ISO 20022 (full name: Financial Services - Universal Financial Industry message scheme) is an international financial communication standard developed by the ISO (International Organization for Standardization) technical committee TC68 (Financial Services). After years of development, it has become a unified standard for global financial messaging, covering multiple financial fields such as payments, securities, trade, cards, and foreign exchange.

From a technical perspective, ISO 20022 is:

A globally unified financial communication standard
A set of standardized data formats and rules
A framework for financial message transmission

For example, you might understand it better with this analogy.

Suppose you want to transfer $1,000 to a friend abroad; this money has to go through multiple rounds of processing:

Your bank sends the payment instruction in its own format
SWIFT translates this instruction into its own format
The intermediary bank may process it using another format
Finally, the receiving bank translates it into a format it can understand

It's like playing a game of telephone; with each round, some information may be lost. Some important information (like payment purpose, invoice number) might even disappear entirely during the conversion process. What seems like a simple cross-border payment actually involves countless rounds of "translation"—because each financial institution speaks its own "dialect."

Therefore, ISO 20022 can be understood as "the global financial Mandarin." Just as Mandarin allows people from different regions to communicate with each other, ISO 20022 enables different financial institutions worldwide to exchange information in the same way.

With ISO 20022, all financial institutions speak the same "language," and the payment information contained in the communication is richer (expanded from the original 140 characters to 9000 characters), the data structure is more standardized (like everyone using the same template), and processing is smarter (machines can read and process it directly). Previous cross-border transfers were like sending telegrams in Morse code; now, it’s like sending a structured email that can not only include attachments but also be automatically categorized and processed.

Cryptocurrencies Actively Embracing ISO 20022

If a cryptocurrency meets the ISO 20022 standard, it will be assigned an official ISO code. Financial institutions can easily use cryptocurrencies for cross-border payments. Additionally, regulators may adopt a more lenient stance towards ISO 20022 tokens; tokens that comply with ISO standards may see widespread use, effectively being "integrated" into the global financial payment system, gaining legitimate payment use cases.

Note: A widely circulated diagram on Twitter, for reference only.

So, which ISO 20022 concept tokens are currently recognized by the market?

XRP (Ripple)

Official Certification Status: The only cryptocurrency project officially certified by ISO 20022.

Specific Implementations:

RippleNet fully integrates the ISO 20022 messaging standard.
Provides a real-time gross settlement (RTGS) system.
Supports end-to-end tracking for cross-border payments.
Established partnerships with over 200 financial institutions.

Major Collaborations:

Interoperability testing with SWIFT.
Collaborating on CBDC projects with multiple central banks.
Establishing direct payment channels with major banks.

XLM (Stellar)

Official Certification Status: Non-official certified member, but technically supports the standard.

Specific Implementations:

Uses a messaging format compatible with ISO 20022.
Provides cross-border payment and remittance services.
Supports asset tokenization.

Major Collaborations:

Strategic partnership with MoneyGram.
Collaborating with over 350 banks in countries like Argentina.
Partnering with Circle to issue USDC.

ADA (Cardano)