ISO 20022-Compliant Stablecoins—Are USDT, USDC Compatible With TradFi Standards?

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Key Takeaways

• ISO 20022 has become the universal standard for financial messaging. 

• Blockchain interoperability is one of the biggest draws of the new standard.

• In a financial system built around ISO 20022, not all stablecoins are equally integrated.

With SWIFT officially retiring its legacy financial messaging format on Nov. 22, ISO 20022 is now the universal standard for financial messaging. 

As financial institutions around the world embrace stablecoins and tokenized deposits, the possibility of integrating digital assets is among the biggest advantages of the new standard.

But which stablecoins are compatible with ISO 20022?

How ISO20022 Treats Stablecoins

Where legacy payments based on SWIFT’s MT (Message Type) format assumed a world of fiat money, bank accounts, and traditional securities, ISO 20022 is asset-agnostic.

The same settlement message can describe a traditional fiat transfer, a tokenized swap, or a stablecoin payment.

ISO 20022 doesn’t bless or ban any particular stablecoin.

It’s a messaging language for banks and market infrastructures, and stablecoins are just another settlement asset that can be described in that language.

However, integrating stablecoins into SWIFT or any other ISO 20022-based payment system first requires standardized identifiers.

Identifier Codes for Crypto

Traditionally, SWIFT identifies securities using the International Securities Identification Number (ISIN) system.

However, banks are increasingly adopting a new framework based on ISO 24165.

ISO 24165 defines unique alphanumeric codes for blockchain-based digital assets.

Any fungible token issued on a distributed ledger can be assigned an ISO 24165 Digital Token Identifier (DTI).

Most mainstream stablecoins now have DTI codes for each instance across different networks.

Which Stablecoins are ISO 20022-Compliant?

While there is a lot of crypto marketing around “ISO 20022 coins,” the idea that some blockchains are compatible with the standard but others aren’t is misleading. 

The official ISO 20022 FAQ is blunt.

Cryptocurrency exchanges and payment processors may integrate the standard for their interactions with the traditional financial system, “but at the protocol level, blockchains themselves are not inherently ISO 20022 compliant.”

Instead of asking whether a given stablecoin supports ISO 20022, a more precise question would be: Can X token be clearly identified and instructed within ISO 20022 flows used by banks and market infrastructures?

For deep TradFi integration, a stablecoin requires universally accepted DTI registrations mapped to an official ISIN.

Because each one has a single issuer performing the operational work required to harmonize standards, the large, centralized stablecoins have pulled ahead in the race to integrate with ISO20022.

For instance, Tether, Circle, and Paxos have all endorsed DTI groupings that define multi-chain stablecoins as a single asset. 

Meanwhile, decentralized coins like Dai/USDS  are moving into the identifier ecosystem as users rally around specific DTI and ISIN codes, but they lag behind their centralized peers in formal standardization.

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