- Fed Announces that Reserve Banks will adopt ISO 20022 Standards
- Current banking language makes it difficult to efficiently process wire transfers globally.
- ISO 20022 compliant cryptos include Bitcoin, Iota, and Algorand.
On Monday, May 2, 2022, the Federal Reserve Board announced that Federal Reserve Banks will adopt the ISO® 20022 message format for the Fedwire® Funds Service.
According to a press release by the Federal Reserve, this new format will allow for an “enhanced efficiency of both domestic and cross-border payments, and a richer set of payment data that may help banks and other entities comply with sanctions and anti-money laundering requirements.”
ISO 20022 was presented by the organization as a means of developing communication between financial institutions. The new standards propose that it will make financial transactions more efficient, unlike today’s standards. Currently, banking institutions are using their own programming languages, making it difficult to transfer funds internationally.
The ISO 20022 was developed by the International Organization for Standardization, an independent, non-governmental organization that addresses and issues standards for a wide range of industries, including financial institutions.
The revised plan for migrating the Fedwire Funds Service to the new message format was invited for public comment by the Board, saying:
Comments are due 90 days after publication in the Federal Register, which is expected shortly.
The Board wants the Reserve Banks to adopt the new message format on a single day instead of in three separate phases as previously proposed.
Ripple (CCC:XRP-USD), and Stellar Lumens (CCC:XLM-USD) are not only ISO 20022-compliant, but they are also members of the ISO 20022 Standards Body, according to the Registration Management Group Member List website.
The Fedwire Funds Service is a real-time gross settlement system that’s owned and operated by the Federal Reserve Banks.
It allows businesses and financial institutions to transfer funds quickly and securely, and it’s a vital tool for the global economy.