Ripple criticized SWIFT for the renewed postponement of the introduction of the ISO 20020 and Marcus Treacher of Ripple described the system as disadvantageous and antiquated as we are reading in the Ripple XRP news.
The delay of the new standard for cross-border payments creates a major problem and even bigger cost for banks which Ripple could avoid with its technology. The ISO 20020 standard is the new change in the banking and finance industry and the Society for Worldwide interbank financial telecommunication SWIFT due to the publication back in November this year. The standard is known as UNIFI (University Financial Industry message scheme) which aims to change the way in which the messages are transmitted between the institutions that conduct cross-border payments and increase the amount of data that SWIFT can transfer.
However, in a meeting back in March 2020, the Board of Directors of SWIFT approved the postponement of the ISO 20022 migration date to the end of 2022. As Finextra reports showed, the unexpected decision surprised institutions from the European market that are facing most hurdles in the monumental transition. The European Central Bank is optimistic about the handling of the plan and the financial institutions even have a hard path ahead of them. Paula Roels who is the Head of Market Infrastructure and Industry Initiatives at Deutsche Bank commented:
“It is encouraging that the ECB and SWIFT are closely working together to address the challenge for the European market: “In this respect, the blueprint provides a very good first insight into the strategy to build on […] While SWIFT’s delay by one year will provide a brief respite to some banks, especially in light of the Covid-19 situation, it also increases the overall project complexity to others, such as the Eurozone banks.”
Ripple became the first Distributed Ledger technology company to join the ISO 20022 standards committee for cross-border payments and Ripple criticized the renewed postponement of its introduction. Marcus Treacher said that the delay will hurt most of the financial institutions that are migrating right now to the ISO 20022 standard. Target2 migration to ISO 20022 and consolidation created a roadmap for the adoption of the standards across European banking institutions.
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