ISO 20022 completed on the Stellar blockchain

• BP Ventures completes the ISO 20022 standard on the Stellar Lumen blockchain.
• Financial institutions will have the opportunity to upgrade their infrastructure.

Blockchain consulting and service firm, BP Ventures has announced the completion of ISO 20022 on the Stellar Blockchain. ISO 20022 is intended to standardize data transfers between financial institutions worldwide for various types of electronic payments.

In addition to payment settlements, the standard is used to settle shares and other securities. Real-time settlement systems including SWIFT, SEPA in Europe, Faster Payments in the UK, etc. already use the standard. The standardization of transfer and compliance protocols enables a company to cut costs and reduce risk. SWIFT started implementation in March 2023.

Founder of BPV, Anthony Barker commented on this initiative:

We believe that we have implemented the most robust mapping of ISO 20022 XML to date. This will allow banks and financial institutions everywhere to take advantage of Stellar’s blockchain technology, stablecoin Circle USDC, and remain compliant with ISO standards.

Over the years, BPV has helped financial institutions improve efficiency, security and market reach. This is through the integration of blockchain solutions for digital asset management in their workflow.

The ISO 20022 support was developed for Stellar’s standardized KYC rails. According to the announcement, the implementation was through Stellar Ecosystem Proposals (SEP) 9 and 31. The benefits of Stellar including 5 second settlement, low fees and instant finality would be leveraged by payments and other asset transfers. While this is done, transactions will be processed simultaneously based on the new ISO 20022 standard.

Some advantages and challenges of the ISO 20022 standard

The development will enable trillions of dollars in financial sector transfers to move to the Stellar network. According to Barker, the implementation will give financial institutions the opportunity to upgrade their infrastructure.

The entire financial sector needs to restructure their workflows to reflect compliance with ISO 20022. This new integration on the Stellar network allows for improved operational efficiency while achieving compliance with the new standard.

According to the ISO organization, ISO 20022 will become the universal standard for high or large value payment systems for all reserve currencies by 2025. This is already used by payment systems in over 70 countries. Data estimates that ISO 20022 supports 80 percent of transaction volume and 87 percent of transaction value globally.

However, it has a challenge of data accuracy inserted into proper message transmission. Each character expected to be entered into the financial message should be foolproof and error-free to conform to the specifications of the standard. This can be validated at both ends of the communication chain. The slightest mistake leads to rejection and delay of the permanent days. Another concern is that all data is entered manually, which means there are opportunities for human error.

While the ISO 20022 standard will have no impact on the digital asset market and will not affect any available crypto, banks and financial institutions will be the only ones to benefit from these implementations. Ripple has also announced that it has joined the ISO 20022 standards body and is working to establish a new data standard for payments between financial institutions.

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