Ripple Positioned as New Payment Rail in ISO 20022 Transition

In a recent tweet, crypto researcher SMQKE highlighted the global transition to ISO 20022, which is enabling new payment rails to operate within the SWIFT network. One of these new rails is Ripple, a blockchain-based infrastructure designed to enhance cross-border financial transactions. SMQKE referenced four different documents to support the claim that Ripple is positioned as a viable alternative within the evolving international payment framework being reshaped by ISO 20022 standards.

One of the highlighted documents discusses how SWIFT GPI, along with other innovative cross-border channels, is shaping the future of international payments. The document explains that European banking systems are implementing ISO 20022, noting that this transition allows for full compatibility across diverse cross-border payment platforms. It further states that ISO 20022 is a “catalyst and enabler” for introducing new payment rails. The implication is that these new rails, developed to meet modern expectations for speed, transparency, and interoperability, can operate alongside or in place of traditional correspondent banking systems. This shift is significant because the ISO 20022 standardizes messaging formats, making it easier for systems to interact regardless of the technology or geographical origin. SMQKE’s assertion that Ripple can function as a new payment rail within this ecosystem is based on the ability of ISO 20022 to support diverse platforms through a unified messaging language.

Another referenced image outlines Ripple as an example of blockchain-based processing. The diagram illustrates Ripple’s use of a cloud-based ledger that interconnects disparate financial systems, allowing international money movement while utilizing existing infrastructure. It describes how Ripple can integrate with financial institutions by serving as a bridge between senders and receivers using market makers for currency conversion and liquidity. The document underscores the benefits of Ripple’s model, including fast, secure, and inexpensive transfers that do not require overhauling the underlying financial infrastructure.

A third document addresses real-time payment systems and introduces the concept of “cryptorails” as alternatives to traditional banking rails. Ripple is highlighted specifically, described as a distributed payment protocol that enables exchanges between any currency. The document clarifies that using such cryptographic networks allows users to send money cheaply and efficiently. By converting funds into local currency upon arrival, these systems achieve fast settlement while circumventing many limitations of traditional real-time gross settlement systems.

The fourth document provides further evidence supporting the role of Ripple as a recognized payment rail within modern financial infrastructure. In a diagram focused on payment ecosystems, Ripple appears alongside traditional payment systems, such as SWIFT and RTGS, as well as other blockchain protocols. The document emphasizes how private blockchains, tokenization, and secure data exchange are essential components for modernizing payment systems. It highlights that Overlay+, a platform built on Corda, supports immutable and auditable data flows while integrating seamlessly with payment rails, including Ripple. This visual inclusion of Ripple within the foundational layer of payment rails demonstrates its acknowledged function in the evolving financial data and payments landscape.

SMQKE’s tweet underscores the transformative nature of ISO 20022, framing Ripple as an operational example of the new payment rails made possible by this global messaging standard. The integration of Ripple within the ISO 20022 framework signifies a shift towards more efficient and transparent cross-border payment systems, leveraging blockchain technology to enhance traditional financial infrastructure.