A recent update on the official ISO 20022 website indicates that Ripple’s Interledger Protocol (ILP) is now eligible to work with the SWIFT network. This development coincides with the global transition of banks to ISO 20022, a universal standard designed to enhance the clarity, security, and ease of sharing financial messages.
Ripple's Direct Connection Capability with SWIFT
The Mojaloop Foundation, an international organization focused on payments, submitted the request for this integration, which received official approval in late 2024. The proposal highlighted that Ripple’s Interledger Protocol enables a direct connection between Ripple’s blockchain and SWIFT’s ISO 20022 network, potentially streamlining cross-border money transfers.
ILP is an established and operational protocol within Ripple’s existing infrastructure. Analysis of available documents suggests that ILP utilizes XRP as a bridge asset for value settlement, with final reconciliation occurring on the XRP Ledger (XRPL). This integration aims to facilitate faster and more efficient movement of funds, bridging traditional banking systems with blockchain technology.
Potential for Ripple in Global Banking Following SWIFT Upgrade
SWIFT's adoption of ISO 20022 represents a significant advancement for the global financial system. With an anticipated 90% of SWIFT messages utilizing this new standard by early 2026, the inclusion of Ripple’s Interledger Protocol could elevate the company's importance for financial institutions during this transitional period.
This development positions Ripple to potentially become a more integral part of the world’s financial infrastructure, facilitating seamless payments between traditional banks operating on SWIFT and Ripple’s blockchain network.
The use of XRP as a bridge asset could further enhance transaction speed, reduce costs, and simplify the process, aligning with the digital coin's design for modern systems. It is important to note that this approval signifies an official step towards integration rather than immediate widespread use. The ISO 20022 standards primarily address messaging protocols and do not encompass all aspects of Ripple or XRP.
Industry analysts suggest that the ultimate impact will be determined by the extent to which banks and financial institutions adopt the ILP-SWIFT connection.
The Global Shift Towards ISO 20022
Payment company Stronghold is already demonstrating the practical application of ISO 20022 and blockchain technology working in tandem, currently implementing ISO 20022 messaging in live financial projects.
A spokesperson for Stronghold has stated that the combination of these technologies significantly improves the efficiency and reliability of money movement processes.
This adoption is part of a larger global trend. All Single Euro Payments Area (SEPA) payments transitioned to ISO 20022 in 2022. In July, the U.S. Federal Reserve announced its plans to adopt the standard, which will replace the current Fedwire Application Interface Manual (FAIM).
SWIFT is scheduled to complete its full ISO 20022 transition by the end of this month. This worldwide migration is fundamentally reshaping the interaction between traditional and digital financial systems, promoting enhanced integration and interoperability.