Through its standards, ISO aims to promote international trade and protect end users by ensuring the products being made are safe and of acceptable quality.
To date, ISO has set over 20,000 standards, and continuously updates them by releasing technical reports, analyses, and publications. ISO’s catalogue of standards includes 97 fields, covering healthcare, agriculture, engineering, shipping, weaponry, metallurgy, and more. The global financial industry is one of the many industries for which ISO sets standards.
In some cases, the term “ISO” is used to describe products that were built according to a certain standard. For instance, the ISO 4210 standard is used for bicycles. If a merchant wanted to import a bicycle into the US, the manufacturer would have to classify it using the ISO code or risk rejection at a shipping port.
Similarly, a crypto that complies with the ISO 20022 standard could be approved by a centralized bank that enables crypto payments. ISO standardized crypto identifiers are going to change the way crypto is used. If ISO issues an official code for a crypto, such as Bitcoin or Ether (ETH), that crypto will enter the database tables of top financial services like Visa and MasterCard.
ISO defines standards for fiat currencies under ISO 4217. This 4217 standard has been used for global bank payments and stock markets since 1978, when it was first codified. According to the standard, each currency is represented by three letters: “USD” for US Dollars, “EUR” for Euros, and so on. This facilitates international transactions and decreases the risk of errors.
If a bank user transfers another bank user $500 USD, they would automatically be using standards decided by the ISO 4217 currency code list that defines the US Dollar as “USD.” Aside from currency codes, ISO also assigns International Securities Identification Number (ISIN) codes to securities including stocks, bonds, and derivatives.
In an official currency code, the first two letters are generally derived from the alphabetic country code (defined in ISO 3166) and the last letter is generally derived from the official currency name. For example, in “CAD,” the “CA” stands for “Canada” and the “D” stands for “dollar.”
The existing code definition method raises issues for crypto codification, because many crypto codes conflict with existing country codes. For example, consider “XBT,” the unofficial ISO code for Bitcoin. The “X” denotes that no country is associated with the asset — similar to the codes for gold (XAU) and silver (XAG). But the “BT” representing “Bitcoin” presents a conflict because it already officially stands for Bhutan in ISO 4217.
The following chart shows some ways in which crypto codes could clash with current ISO 4217 currency identifiers:
|Crypto||Unofficial ISO Code||ISO Conflict|
|Bitcoin||XBT||Conflicts with ISO 4217 because BT stands for Bhutan.|
|Ethereum||ETH||Conflicts with ISO 4217 because ET stands for Ethiopia.|
|Bitcoin Cash||XBC||Is identical to the ISO 4217 code for the European Unit of Account 9.|
|Solana||SOL||Is identical to the ISO 4217 code for the official currency of Peru.|
For cryptos to be classified as legitimate currencies by ISO, they have to both comply with new standards in global financial systems and have an ISO code that doesn’t conflict with existing codes.