We are witnessing a major shift in the world of money and banking as banks, payment networks, clearinghouses, and securities companies move to ISO 20022, a new universal messaging standard for global payments and cross-border settlement.
While this is an important milestone in the history of finance, it is also a major contributing factor to creating institutional interest in digital currencies, such as Bitcoin (BTC) or Cardano (ADA). This is done by establishing standards for how digital data is processed by banks and other financial institutions.
Over the last few months, people have been discussing Cardano online and referring to it as compliant with ISO 20022. But what does this really mean? Is Cardano actually certified as ISO 20022 compliant? And what does this mean for ADA and the banking industry?
Confusion exists regarding how the term “compliant” is used in cryptocurrencies. Therefore, it is important to understand the difference between certification, compatibility, and alignment while assessing the use of Cardano by banks to conduct business with clients.
What Is ISO 20022?
ISO 20022 is a global financial messaging standard that defines the way that the various types of financial institutions can structure and send transaction data, such as payments, securities settlements, trade finance messages, and others. The goal of ISO 20022 is to improve communication between financial institutions by creating a common format for sending transactions.
ISO 20022 is not a protocol for blockchains, nor is it a certification process for digital currencies. Instead, it is a set of standards for various types of structured data used in the messaging systems of banks and payment systems.
ISO 20022 offers many benefits to users, which include:
- Greater richness of data within the transaction data fields
- Greater interoperability among the various financial institutions
- Improved compliance review of transactions
- Quicker and more transparent settlement times
Several major financial infrastructure providers have already started to implement ISO 20022 into their systems, with SWIFT migrating its global messaging network to ISO 20022, while the Federal Reserve moves to ISO 20022.
The ISO 20022 Compliance Debate in Crypto
Within cryptocurrency communities, there are claims regarding certain blockchains, Cardano in particular, as “ISO 20022 compliant,” but this is where the main problem lies. No cryptocurrencies, blockchains, or tokens have been certified or approved as ISO 20022-compliant, as the standard does not apply to tokens.
ISO 20022 is a standard for governing and specifying messaging formats utilized by financial institutions and not the consensus protocols of a blockchain or its native asset.
Blockchain can provide support for ISO 20022 structured messaging with systems utilizing the standard. However, this does not indicate that it has been certified or approved. There are discussions in the cryptocurrency community that tend to blur the line between support, certification, and compliance.
The fact that a blockchain or token has the potential to accommodate structured metadata in a similar manner as ISO 20022 does not imply that it is certified or compliant.
| Term | What It Means | Applies to Cardano? |
| ISO 20022 Certified | Official approval by ISO | ❌ No |
| ISO 20022 Compliant | Formal adherence to standard | ❌ No |
| ISO 20022 Compatible | Can support structured messages via middleware | ✅ Yes |
| ISO 20022 Aligned | Designed with interoperability in mind | ✅ Yes |
Where Cardano Actually Stands
Cardano (ADA) commonly features on various ISO 20022 cryptocurrency lists along with platforms like XRP, Hedera, and Algorand, among others.
The most significant factor for this connection is that the Cardano architecture provides support for rich metadata on transactions. Because of this capability, developers can create middleware or APIs that convert ISO 20022 messages into chain instructions through Cardano-implemented smart contracts.
Cardano’s co-founder, Charles Hoskinson, has publicly stated Cardano’s ability to support structured messaging standards and aligns itself with ISO 20022 efforts, all of which are part of larger conversations around the interoperability of institutional markets.
Cardano cannot be classified as ISO 20022 under strict technical definitions, nor is there an official certification for being so. Cardano is not formally ISO 20022 compliant in a strict technical or certification sense. That terminology is a misnomer. Its support is better described as ISO 20022-compatible messaging capability or aligned with the ISO 20022 adoption agenda.
Why ISO 20022 Compatibility Matters for Cardano
Financial institutions have existing financial systems that they are trying to bring into the new standards of ISO 20022. As all major settlement systems and SWIFT will be adopting them, they will need to work with the ISO 20022 messaging structure to use the new tech for real-world global cross-border payments.
The elements of the Cardano infrastructure that could potentially be utilized as a settlement layer for decentralized finance include smart contracts, native tokenization, and relevant metadata in transactions.
If there is a way to take an ISO 20022 message and convert it into a Cardano transaction using a middleware solution, then theoretically, the Cardano network can act as a settlement layer for the standardized financial messages.
This is crucial for financial institutions since banks are already moving towards ISO 20022. If the data in a transaction has a structured format, it makes it easier for institutions to be compliant and will also facilitate auditing.
What ISO 20022 Means for ADA’s Institutional Prospects
If ADA could incorporate Cardano’s messaging features into ISO 20022 workflows, several benefits could accrue to ADA, such as
- Increased ADA use for cross-border payments
- Improved speed of settlement with richer data content during the transaction
- Stronger interest from banks and other regulated financial institutions
These developments parallel the conversations occurring with XRP and Hedera as well, where messaging compatibility has been one of the primary reasons for their institutional relevance.
However, technical capabilities do not guarantee adoption. Regulatory clarity, liquidity depth, custody solutions, and compliance frameworks are critical to the successful ADA adoption by institutions. Note that institutional onboarding is primarily driven by integration, partnerships, and legal certainty, and not messaging standards alone.
Governance upgrades and interoperability initiatives, which include privacy-focused layers like Midnight, within and across the broader Cardano ecosystem, could build on this potential for future institutional onboarding.
For more information about the overall positioning of ADA, please view our previous analysis: “Why Cardano Isn’t Dead?“
Challenges & Limitations
The fact that Cardano’s messaging standards align with ISO 20022 does not necessarily equate to Cardano being integrated into ISO 20022 banking workflows today. The adoption of Cardano by enterprises relies on their integration, commercial partnerships, and regulations surrounding Cardano use.
However, institutions must have legal clarity, such as SEC guidance or EU MiCA compliance, secure custody solutions, liquidity infrastructure, and operational support tools.
Competing networks have been designed from the beginning to facilitate cross-border payments and financial messaging. Therefore, Cardano also competes with those networks. Technical alignment is only a small piece of the institutional puzzle that needs to be solved.
Conclusion: ISO 20022 and Cardano – What You Should Remember
To conclude, ISO 20022 is a financial messaging specification and does not include a token certification process. Cardano is not ISO 20022 compliant in a formal or certified sense, but its architecture can support structured data and middleware compatible with ISO 20022 messaging.
This compatibility provides a compelling reason for institutional adoption of the Cardano ecosystem, especially if there are appropriate middleware, custody solutions, and regulatory clarity, and the integration into traditional financial systems continues to evolve over the long term.
