Ethereum (ETH) Fails to Meet ISO 20022 Compliance. Here's the Consequence

Crypto researcher SMQKE has highlighted recent statements from industry leaders stressing that no digital asset platform can achieve market leadership without ISO 20022 compliance. The messaging underscores the growing recognition that integration into the global payment and settlement infrastructure is essential for broad institutional adoption.

ISO 20022, an international standard for financial messaging, provides a unified and structured framework for transmitting payment data across borders, enabling seamless communication between institutions.

This access, according to the statement, is directly linked to the ability to integrate with existing global financial networks, which ISO 20022 facilitates.

Institutional Payment Adoption and Regulatory Alignment

The attached image from SMQKE’s post references research by Fernández Herraiz and De Mata, which notes that existing Ethereum token standards currently fail to meet certain regulatory requirements, including ISO 20022 compliance.

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This compliance is critical for institutional payment adoption. Without adherence to such standards, digital asset platforms may face barriers in achieving acceptance within regulated financial markets.

The research also indicates that institutions encounter ambiguity in the accounting treatment of stablecoins, which are often considered for classification as cash-equivalent assets due to their low volatility.

However, the absence of clear regulatory and accounting frameworks continues to create uncertainty. Addressing these gaps, particularly through harmonized global regulations and legal models, is seen as necessary for unlocking the full potential of digital assets in mainstream finance.

Pathway to Global Finance Integration

SMQKE’s commentary emphasizes that to reach the broadest client base and effectively compete with established financial entities, digital asset platforms must achieve full operational integration with the global payment and settlement infrastructure.

ISO 20022 serves as the primary gateway to such integration, ensuring that platforms can operate on equal footing with traditional financial systems at the highest level.

In practical terms, ISO 20022 enables richer and more structured financial data, enabling interoperability across jurisdictions. For digital asset platforms, this capability can facilitate cross-border settlements, institutional payments, and regulatory compliance, all of which are prerequisites for competing in top-tier markets.

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