Questions regarding the compliance of the cryptocurrency XRP with the ISO 20022 standard have sparked discussions among experts and market participants. This article covers comments from businessman Jake Claver and a constructive response from Nik Bougalis.
Statements by Jake Claver on XRP and ISO 20022
Jake Claver, a businessman and financial strategist, stated that XRP is the first cryptocurrency to prioritize ISO 20022 compliance. He noted that this has given the asset significant advantages in connecting with the traditional financial system, adding that the network processes over $434 billion in transactions daily.
Response from Nik Bougalis
In response to Claver's statement, Nik Bougalis, a software engineer, clarified that ISO 20022 is a messaging standard while XRP is a digital asset. He emphasized that XRP is no more compliant with ISO 20022 than BTC, pork bellies, baseball cards, or vinyl records, meaning it is not compliant at all. Bougalis added that while some of Ripple's commercial software supports ISO 20022, this has no direct connection to XRP or the XRP Ledger (XRPL).
Distinctions between Messaging Standards and Digital Assets
Bougalis's technical clarification highlights that ISO 20022 defines how financial messages are structured and transmitted between institutions. Compliance refers to the capability of software systems to process and exchange messages per this standard. A digital asset, such as XRP, is a token recorded on a blockchain or distributed ledger. Its existence and transfer are independent of the messaging formats used by financial institutions. While infrastructure around XRP may support ISO 20022 to enable integration with banks and payment networks, this does not mean XRP itself is compliant with the messaging standard.
The discussion between professionals underscores the importance of accuracy when discussing interoperability between blockchain assets and traditional financial systems. Understanding the distinctions between the properties of assets and the capabilities of the software that facilitates their transfer is crucial for forming a correct understanding of the complexities surrounding cryptocurrencies and their integration with the traditional financial system.
