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🌐 ISO 20022: to March and beyond – Deutsche Bank 🌐
January 08, 2023
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SWIFT plans to introduce a central Transaction Manager (TM) platform, which will be mandatory for all SWIFT users. This article provides an update on ISO 20022 payments standard migration so far...

The upcoming implementation of ISO 20022 in the high value payments (HVP) space is set to unlock a host of benefits for the cross-border payments industry – from improved compliance processes to the creation of innovative products and services. Deutsche Bank’s Joey Han explores how preparations are ramping up – and what we should expect as we transition into the ISO 20022 era

The origin of ISO 20022 dates back to 2004, when it was first recognised by the International Organisation for Standardisation (ISO) as the global payment standard of the future. Eighteen years later, this future has nearly arrived. Once Society for Worldwide Interbank Financial Telecommunications (SWIFT) and major payment market infrastructures (including T2, Fedwire/CHIPS and CHAPS) have migrated to the new standard over the next couple of years, ISO 20022 will apply to the entire spectrum of payments, including domestic, automated clearing house (ACH), real-time and high value cross-border payments.

The new standard is comprehensive in scope, flexible in nature and will act as a harmonised, global standard. This comes at a critical time for the industry, with calls for seamless and faster payments growing louder – and it is hoped that these attributes can provide the foundation for uplifted customer experience, streamlined compliance procedures, and a host of new, innovative services.

The decision to migrate HVP to ISO 20022 gave rise to a multi-year, industry-wide set of preparations – involving all key actors, from financial institutions and corporates, to clearing infrastructures and SWIFT.

Over the past few years, however, the proposed migration strate­gies have, for a variety of reasons, been somewhat of a moving target. Most recently, the European Central Bank (ECB) announced what is anticipated to be final change to its strategy, with the go-live date mov­ing from November 2022 to March 2023 to give participants additional time to complete their testing in a stable environment. In order to align with the ECB’s revised strategy – and to ensure the implementation is as straightforward as possible – both European Banking Authority (EBA) Clearing and SWIFT announced that they would also sync up their re­spective migrations. The Bank of England is scheduled to migrate in April 2023 (though a deadline extension is also being considered), followed by The Clearing House and The Federal Reserve Banks in November 2023 and March 2025 respectively.

The differences in migration timelines and scope, as well as the fact that some banks will migrate immediately, while others will wait, is introducing a host of challenges – and ultimately delaying the benefits the new, data-rich payment standard can bring. So, how are these challenges being addressed, and what are the main considerations going forward?

Full steam ahead in APAC

The migration of domestic, HVP systems in Asia Pacific (APAC) are al­ready well underway. In summer 2022, several ISO 20022 migrations took place across APAC. Paving the way for the rest of the world, Thailand’s RTGS system – known as Bank of Thailand Automated High-value Transfer Network (BAHTNET) – became one of the first payment infrastructures to introduce ISO 20022 this year, along with the Malaysian RTGS (RENTAS) and the Singaporean RTGS (MEPS+). Additionally, Australia will be going live in March 2023, with a co-existence period lasting until November 2024. New Zealand will also go live at the same time.

What can we learn from the early adoption of ISO 20022? Not all migrations are created equal. When moving to ISO 20022, banks operating in multiple markets have to navigate different geographical and regulatory conditions, as well as different technical approaches. Both a phased “like-for-like” approach and a “big-bang” approach will also impact the migration project, operations and end customer in different ways.

Also, while the rules for how to use ISO 20022 messages are based on the market practices outlined by High Value Payments Systems Plus (HVPS+) and are in line with Cross-Border Payments and Reporting Plus (CBPR+), they are still not the same in every market. Close attention is needed to spot and prepare for these subtle differences – or risk a higher volume of rejects and further issues in payments processing.

“The ISO 20022 migration is much more than just a new messaging format, it is the start of an entirely new era for payments”
Joey Han, Clearing Solutions Specialist, APAC, Institutional Cash Management at Deutsche Bank

Transaction management

Though several communities are already using ISO 20022, with the upcoming changes covering correspondent banking, the significance of the move to the new standard is much more far reaching. Cor­respondent banking largely relates to cross-border payments, but it also includes domestic payments between correspondents – or indirect participants – and their direct participants in the domestic HVP market infrastructures.

As part of its migration, SWIFT plans to introduce a central Transaction Manager (TM) platform, which will be mandatory for all SWIFT users. The TM will orchestrate transactions end-to-end, replacing the point-to-point messaging that is currently in use. The first interbank message in the payment chain will trigger the creation the Transaction Copy, which will then be updated with each subsequent message in line with strict data integrity rules. The improvements this will bring to end-to-end transaction integrity is one of the major drivers for the introduction of the platform. The technical deployment of the TM took place in November 2022, with no payment traffic expected until May 2023.

It will also play a key role in helping financial institutions navigate SWIFT’s co-existence phase (March 2023 to November 2025) – the period in which MT and ISO 20022 messages will remain interoperable – by removing the “weakest link” problem and mitigating the risk of data truncation. The TM will achieve this by maintaining a complete copy of the transaction data and reinstating any data that the intermediary agent could not include in the message type (MT) message. In line with the co-existence period – and the challenges it brings – many banks, such as Deutsche Bank, have promised to maintain their MT receiving capabilities throughout the entire co-existence period. 

A while longer to wait

Though the TM will be a great asset to the industry, it will not be the silver bullet from day one. Before the full benefits of the TM can be unlocked, there will be a short period where it will not process any bank traffic and the processing rules will not be applied. This means that when the CBPR+ messages go-live in March 2023, and the first financial institutions begin to process data-rich ISO 20022 payments, the TM rules will not be ap­plied to these transactions.

With TM functionality not expected to be offered until May 2023, end-to-end preservation of rich data will not be guaranteed on any mes­sages until then. Because of this, many financial institutions – including Deutsche Bank – are recommending that market participants avoid using the enriched data during the first few months of the migration phase to help reduce and mitigate any possibility of data truncation. This is in line with recommendations from the Payments Market Practice Group (PMPG).

From May 2023, the TM is scheduled to go through a three-stage, build-up approach to ensure platform stability and mitigate concentra­tion risk. Over the course of the build-up period, SWIFT will be closely monitoring the payment channels and watching for high levels of traffic. If, at any particular time, an extraordinarily high volume of messages was detected, SWIFT would be able to react and help reduce the number of payments being routed through the TM by introducing additional routing criteria. Under current plans, SWIFT aims to achieve this by broadening or shortening the unique end-to-end transaction reference (UETR) range, as required. For instance, if a UETR range is limited to 1A-10, this means that only transactions with a UETR that includes the last two characters from this range will be routed via the TM.

Translation and truncation

SWIFT’s in-flow translation will act as a central translation engine to sup­port banks already using ISO 20022, as well as those that continue to use MT messages. ISO 20022 messages will be translated to MT and delivered as multi-format (ISO 20022 with embedded translated MT) messages. By translating ISO 20022 messages to the MT equivalent and delivering both formats to the receiver, the tool will play a critical role in supporting the co-existence phase, as well as compliance processes. A non-ISO 20022 enabled institution, for example, will use the ISO 20022 format to perform the necessary compliance due diligence, and use the MT format for processing.

But that is not to say there won’t still be issues with truncation. If a non- ISO 20022 enabled institution is acting as an intermediary in a transaction, it will not be able to send on the rich ISO 2022 data it receives – and will instead send on a truncated MT message.

There are two main types of truncations: those that are indicated by a “+” in the body of the truncated messages (for ISO elements with direct MT equivalents), and those that aren’t (for ISO elements without direct MT equivalents). In the latter case, the elements unique to ISO will be mapped into the non-equivalent elements in fields 70 and 72. If the available space in these fields were filled, the elements of a lower translation priority would be dropped from the message.

The in-flow translation will, therefore, be particularly important during the first few months of the migration. With the TM not fully operational by until May 2023, the in-flow translation will provide a much-needed additional layer of protection. The translation report – that comes with each translated message – will identify instances of truncation, as well as provide detailed information on the translated MT. Where truncation is identified, CBPR+ has provided a standard, global template to be used for additional data requests.

Carry on testing

With the migration now in sight, what is left to do? Many of our clients have been reaching out to us asking about the possibilities of testing. In this respect, we have been as accommodating as possible regarding bilateral tests. And while it is clearly not feasible to test with every client, we have also taken steps to facilitate self-service activities.

For example, Deutsche Bank recently launched the DB Institutional Cash Management (ICM) Portal on SWIFT MyStandards. The portal aims to provide ICM usage guidelines (UGs) for pacs.008, pacs.009 and pacs.009COV, which are based on CBPR+ and enriched with Deutsche Bank annotations. These can be used as the basis for any testing activity on MyStandards.

As the deadline approaches, it is worth remembering the reason these efforts are being made. The ISO 20022 migration is much more than just a new messaging format, it is the start of an entirely new era for payments. It is a huge opportunity to fundamentally reassess and greatly improve existing business models and solutions. In doing so, it will help the payments community meet the changing needs of their clients – both now and in the future.

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XRP is no longer a speculative digital asset

XRP is no longer a speculative digital asset it is now the centerpiece of a rapidly unifying global financial infrastructure, positioned to power everything from crossborder payments and institutional treasury to real world asset tokenization and decentralized liquidity.

Here’s a high-level overview of what’s happening

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đŸ”čPotential...

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Fund Tokenization Prepares Asset Managers for ‘Perfect Storm’

Synopsis:

  • Great Wealth Transfer will see $84 trillion of intragenerational asset transfer over the next 20 years
  • Gen Y and Z investors favor investment in alternative asset types, which tokenization makes more investable for HNW clients
  • Tokenization encourages platform changes, and will ultimately bring additional operational benefits

A triumvirate of large-scale market changes are set to transform the asset management industry over the next decade.

With trillions of dollars worth of assets set to flow into the wallets of Gen X, Y, and Z investors, much of which will accumulate onchain, asset managers who move first to serve this new market will gain an advantage in capturing this revenue opportunity. The immediate opportunity is similar to when the ETF format was introduced in 1993, with first-mover State Street launching the SPY (SPDR S&P 500 ETF)—now one of the largest ETFs globally. The tokenized asset format is today’s generational opportunity.

Tokenization can unlock accessibility to alternative asset types and more composable assets and structures, enabling a significant change in how investors manage portfolios. With greater automation and rules-based investment allocations, entirely new strategies could also become economically viable. Integrating existing platforms with next-generation digital systems will enable the industry to modernize in stages, ultimately allowing for the adoption of new asset types at scale.

The forthcoming vicennial transformation of the industry will enable it to transform and emerge triumphant. Those at the forefront of this technology evolution stand to dominate and shape the future of asset management.

 

Great Wealth Transfer prompts global investment shake-up

The asset management industry is on the cusp of the largest wealth transfer event ever, set to last for the next two decades. Consulting firm Cerulli Associates estimates $84 trillion in assets is set to change hands as wealth passes from the baby boomer generation to Gen X, Y, and Z investors.

However, the investment behavior of these younger benefactors differs significantly from their forebears in two ways. Holding Web3 wallets and accounts on Robinhood, rather than brokerage accounts like their parents, millennials are opting for a more self-service model in their long-term holdings. Add to that the shift in risk appetite, searching for higher growth through less conventional asset types like private markets and crypto, and the need for the industry to transform quickly is clear.

Whilst the industry is not currently set up to offer this new investor class more customization, as opposed to one-size-fits-all product offerings, an 80% majority of asset managers believe customization for the masses will be an important investment strategy in the next five years.

 
 

                                          Ryan Lovell, Chainlink Labs

 

While asset managers could build their own proprietary blockchain infrastructure and smart contract systems from the ground up, that approach would require significant resources and specialized engineers, extend time to market, and be at higher risk of technical vulnerabilities or implementation errors. On the other hand, fully outsourcing the implementation would leave them with limited roadmap control, interoperability, and customizability, along with dependency risks.

Ryan Lovell, director of capital markets at Chainlink Labs, commented: “That’s why leading asset managers are taking a hybrid approach, leveraging both existing systems and Chainlink’s decentralized infrastructure to implement modular solutions that can scale across multiple blockchains.”

 

Industry transformation through tokenization

The launch of tokenized funds by firms such as BlackRock, Franklin Templeton, and Fidelity International has created a need for the fund administration industry to evolve to an onchain format. However, nearly all, 93% of fund services firms, have not automated data inputs, data checks, and key workflows, so their operations are still manually intensive, leading to increased operational costs, reduced liquidity, and missed investment opportunities. Standard transfer agent processing can take between one and three days for routine transactions, and between five and seven days for complex cases requiring additional compliance checks, cross-border settlements, or manual document verification.

“Operational efficiency is just the starting point of tokenizing funds,” said Lovell. “The real value is meeting the needs of future investors who are increasingly accumulating wealth across multiple blockchain networks.”

In order to reach this new onchain world, asset managers and their service providers may not want to make a huge investment to completely change their infrastructure, but instead adapt their existing systems to make them compatible with multiple blockchains.

For example, in November 2024, SBI Digital Markets, UBS Asset Management, and Chainlink completed the implementation of a tokenized fund to demonstrate how existing fund administration processes can be successfully made compatible with tokenized funds.

SBI Digital Markets, as a custodian and fund distributor, used smart contracts, oracle networks, and multiple blockchains to automate its processes. One of the key components was the digital transfer agent smart contract, which used multiple oracle networks from Chainlink and its blockchain-agnostic architecture to create a unified golden record.

Lovell compared the digital transfer agent to an offchain/onchain coordinator that does everything that a traditional transfer agent does, but in digital form.

“It does not replace the existing system but enables firms to be compatible with blockchain and then offer a service that can scale to all their customers,” he said. “Asset managers should be demanding this from their service providers.”

The pilot showed that a tokenized fund could maintain its share register on one blockchain while using Chainlink’s Cross-Chain Interoperability Protocol (CCIP) to enable the processing of intensive fund lifecycle activities such as subscriptions and redemptions on different blockchains while meeting institutional security and compliance standards.

Swift, UBS Asset Management, and Chainlink also settled tokenized fund subscriptions and redemptions using the Swift network, which enables payments with fiat currencies across more than 11,500 financial institutions in over 200 countries.

                                     Winston Quek, SBI Digital Markets

Winston Quek, CEO at SBI Digital Markets, said in a statement: “This new way of launching fund structures and administering them via smart contracts empowers both fund managers and their service providers to deliver new onchain financial products and lower operational costs to investors, both things they are actively looking for.”

In addition to lowering costs, using blockchains increases transparency and allows real-time reconciliation between the fund distributor and the fund issuer. Lovell highlighted that Chainlink can also use the same architecture to enable investors who want to hold tokens that are backed by offchain assets, settle these tokens across any blockchain, incorporate data that is needed to process transactions onchain, such as NAV data, and coordinate payments between distributors and the asset managers.

In the U.S. there are requirements around private and public funds and Chainlink enables asset managers to consolidate and consume onchain record keeping while fulfilling regulatory obligations. U.S. funds also require the distributor to onboard users and buy and sell the fund while the custodian and fund accountant provide reporting data.

“We allow all of those service providers to coordinate outside of their firewalls,” said Lovell. “Chainlink’s goal is to enable the TradFi and DeFi worlds to seamlessly connect, which increases utility.”

 

The Great Wealth Transfer is driving asset management onchain

With $84 trillion set to flow from baby boomers to Gen X, Y, and Z, their demand for alternative asset types and customization will shape the future of asset management. While today’s systems may be prohibitively expensive to offer these benefits at scale, tokenization changes the economics.

Tokenized funds by BlackRock, Franklin Templeton, and Fidelity International have already proven the demand for onchain assets, while a solution by SBI Digital Markets, UBS Asset Management, and Chainlink has demonstrated the operational efficiencies of blockchain technology and how onchain assets can be provided at scale.

The choice is clear for asset managers and service providers: embrace the tokenization revolution and lead the next era of finance or risk being left behind. Those who act now will not only gain a first-mover advantage but also shape the future of the industry.

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Stellar's Ecosystem Surges Forward: Smart Contracts, Lightning Speed, and Real-World Impact in 2025

The Stellar blockchain ecosystem is experiencing remarkable momentum in 2025, with groundbreaking technical achievements and expanding real-world adoption that position it as a major player in the decentralized finance landscape. From lightning-fast transaction speeds to innovative smart contract capabilities, Stellar is demonstrating that blockchain technology can deliver both performance and practical utility.

Technical Breakthroughs Drive Performance

The Stellar Development Foundation's Q1 2025 quarterly report reveals impressive technical milestones that showcase the network's maturation. The platform now processes an astounding 5,000 transactions per second with remarkably fast 2.5-second block times, putting it among the fastest blockchain networks in operation today.

This performance leap isn't just about raw numbers—it represents Stellar's commitment to creating infrastructure that can handle real-world demand. Whether it's cross-border payments, asset tokenization, or decentralized applications, the network's enhanced capabilities provide the foundation for scalable blockchain solutions.

Smart Contracts Get Smarter with Soroban

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This focus on developer experience is crucial for ecosystem growth. By lowering barriers to entry and improving the development process, Stellar is positioning itself to attract innovative projects and talented developers who might otherwise choose competing platforms.

New Token Standards Meet Market Needs

The Stellar Development Foundation has introduced new token standards developed specifically based on feedback from developers and institutional users. This responsive approach to platform development demonstrates Stellar's commitment to building technology that meets actual market needs rather than theoretical requirements.

These standards are particularly important as institutional adoption continues to grow, with organizations requiring robust, compliant, and flexible token frameworks for their blockchain initiatives.

Global USDC Integration Expands Utility

The integration of USDC across Stellar's global network represents a significant milestone for practical cryptocurrency adoption. Stablecoins like USDC provide the price stability necessary for everyday transactions and business operations, making them crucial for blockchain platforms seeking real-world utility.

This integration is particularly impactful in emerging markets, where access to stable digital currencies can provide financial services to underbanked populations and facilitate more efficient cross-border transactions.

Industry Events Build Community Momentum

The Stellar ecosystem's growing influence is evident in its presence at major industry events. The foundation's participation as a sponsor at Consensus 2025 in Toronto and Digital Assets Week in New York demonstrates its commitment to engaging with builders, investors, and institutional leaders across the blockchain space.

These events serve as crucial networking opportunities and platforms for showcasing innovative projects within the Stellar ecosystem. Recent Meridian events have highlighted creative projects like Skyhitz and HoneyCoin, illustrating the collaborative spirit and diverse applications being built on the platform.

Real-World Impact in Emerging Markets

Perhaps most importantly, Stellar's growth isn't just about technical metrics—it's about real-world impact. The platform's focus on emerging markets addresses genuine financial inclusion challenges, providing efficient payment rails and access to digital financial services where traditional banking infrastructure may be limited.

This practical approach to blockchain implementation sets Stellar apart from projects that focus primarily on speculative trading or theoretical use cases. By solving actual problems for real users, Stellar is building sustainable demand for its technology.

Looking Ahead: Enterprise-Grade Infrastructure

Stellar positions itself as offering enterprise-grade asset tokenization alongside its DeFi capabilities and payment infrastructure. This comprehensive approach makes it attractive to institutions looking for a single platform that can handle multiple blockchain use cases.

The combination of fast transactions, low costs, smart contract capabilities, and regulatory-conscious development creates a compelling value proposition for enterprises considering blockchain adoption.

The Road Forward

As 2025 progresses, Stellar's ecosystem appears well-positioned for continued growth. The technical infrastructure improvements, developer-focused enhancements, and real-world adoption initiatives create a strong foundation for expanding use cases and user adoption.

The blockchain industry has seen many projects promise revolutionary capabilities, but Stellar's focus on delivering measurable performance improvements and practical solutions suggests a mature approach to blockchain development. With transaction speeds that rival traditional payment systems and growing institutional adoption, Stellar is demonstrating that blockchain technology can move beyond experimental phases into mainstream utility.

For developers, institutions, and users looking for blockchain solutions that prioritize both performance and practical applicability, Stellar's 2025 developments represent significant progress toward a more accessible and useful decentralized financial ecosystem.

Source: The Dinarian ⚡ Claude AI

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Soroban Security Audit Bank: Raising the Standard for Smart Contract Security

The Stellar Development Foundation (SDF) is deeply committed to helping ensure that the highest security standards are available for projects building on the Stellar network. Last year SDF launched the Soroban Security Audit Bank, an initiative to provide projects access to auditing experts and tooling that are proven to help prevent hacks by catching potential bugs, inefficiencies, and security flaws before contracts go live. Through the Soroban Security Audit Bank, we’re empowering teams building on Soroban with comprehensive security audits from leading audit firms, enhanced readiness support, and robust tooling, significantly elevating the ecosystem’s safety and efficiency.

Since launch, the Soroban Security Audit Bank has successfully conducted over 40 essential audits, deploying over $3 million to support security of the smart contracts on Stellar. Check it out!

 

Ecosystem Success Stories: How the Soroban Audit Bank Drives Security Forward

By making automated formal verification available to developers, in addition to allocating significant budget for securing many of the top DeFi protocols built on top of Stellar, SDF has established a new security standard in the Web3 ecosystem. –Mooly Sagiv, Co-Founder of Certora
SDF has been a strong partner as we’ve worked with teams across the Stellar ecosystem. SDF’s Audit Bank initiative allows for a smooth and streamlined review process, and is a clear reflection of the Stellar ecosystem’s enhanced commitment to security. –Robert Chen, CEO of OtterSec
 

Leading projects within the Soroban ecosystem have highlighted the impact of the Audit Bank

Finding a good auditor is difficult, expensive, and high-stakes. The Audit Bank streamlines the process and supports ecosystem projects with security review at critical growth milestones. –Markus Paulson, Co-Founder of Script3
The audit firms we worked with deeply understood the full ecosystem and the underlying protocols used. Their expertise and the tools from the Audit Bank strengthened our security and supported user and investor trust. –Esteban Iglesias Manríquez, Co-Founder of Palta.Labs

What's New in 2025: Enhanced Audit Support for Soroban Builders

Teams building financial protocols, high-dependency data services, high-traction dApps funded by the Stellar Community Fund are able to request an audit and will typically be matched with a reputable audit firm within two weeks. We recently restructured the program for this year to enhance audit efficiency and incentivize accountability, and rapid and complete vulnerability remediation:

  • Complimentary Initial Audit: Projects will need to contribute 5% of the audit cost upfront, but this co-payment amount is eligible for a full refund, provided that critical, high, and medium vulnerabilities identified are swiftly remediated within 20 business days of receiving the initial audit report (learn more).
  • Incentivized Security at Key Traction Milestones: Complimentary, extensive follow-up audits are available as projects achieve critical traction milestones (e.g., $10M and $100M TVL). These audits include deeper assessments such as formal verification or competitive audits, significantly boosting project security at pivotal stages.
  • Advanced Security Tooling: Projects can enhance their security self-serve through complimentary or discounted access to specialized tooling, which provide vulnerability detection and formal verification capabilities (see full list of available tooling). These tools are encouraged to capture ‘easy-to-spot’ issues prior to audit as well as a final check post-audit to increase the effectiveness and thoroughness of audits.
  • Enhanced Audit Readiness Support: Projects receive structured preparation support, including the implementation of best practices and security standards based on the STRIDE threat modeling framework. This ensures project teams are thoroughly prepared, optimizing audit efficiency and minimizing delays.

Get Started Today

If you're already funded through the Stellar Community Fund, meet the criteria and ready to secure your smart contracts, check your email for an invitation to submit an audit request–if you haven’t received one, contact [email protected].

If you haven't built on Stellar yet, we encourage you to start your journey with the Stellar Community Fund to become eligible for future security audits and ecosystem support. For any broader questions on the program, contact [email protected].

Also, we’re organizing an exciting series of workshops–join us for the kick-off on Soroban Security Best Practices on Friday, May 30, 2025 at 2 PM ET on @StellarOrg. Together, we're shaping a secure and resilient future for smart contracts on Stellar.

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