Key Takeaways
- SWIFT sunsetted the MT (Message Type) format for financial messaging on Saturday, Nov. 22.
- Having migrated to ISO 20022, global banks are now positioned to accelerate blockchain adoption.
- ISO 20022 enables interoperability between different CBDCs, tokenized deposits, and blockchain solutions like Ripple and Stellar.
For nearly half a century, the SWIFT MT (Message Type) format has been the backbone of international financial communication.
However, with the migration to an updated format based on the ISO 20022 standard now complete, on Saturday, Nov. 22, the older MT system was officially retired.
With global banks and payment networks now unified around ISO 20022, the stage is set for the widespread integration of blockchains into mainstream finance.
What is MT Format?
When SWIFT went live in 1977, it revolutionized cross-border payments by giving banks a globally standardized way to talk to each other.
At the heart of the system, the MT format enforced a rigid, fixed-field structure for all financial messages.
Simple, alphanumeric codes conveyed transaction information, freeing bank workers from the cumbersome, back-and-forth communications that characterized the previous era.
Moreover, as a universal language, the MT format transcended differences between national banking systems, enabling unprecedented interoperability.
This standardization was instrumental in SWIFT’s rapid growth, allowing it to connect thousands of financial institutions around the world and facilitate the explosion of global trade and finance in the late twentieth century.
However, the very design that made the MT format successful in its era became its most significant limitation in the digital age.
Highly structured, character-limited fields were designed for efficiency over low-bandwidth connections, not for rich data exchange.
As transaction complexity increased and financial regulations required banks to record more information, the MT format struggled to keep up.
ISO 20022 Migration Paves the Way for Blockchain Integration
By the early 2000s, fragmented supplementary messaging systems threatened to undermine SWIFT’s mission of global interoperability.
To address the challenge, the International Organization for Standardization introduced ISO 20022 in 2004.
Unlike the rigid MT format, ISO 20022 is designed to be more flexible, allowing for the creation of new fields and message types.
For instance, national bank networks can define their own parameters according to domestic requirements.
Crucially, because the new format utilizes XML, messages are both human- and machine-readable, making it ideal for blockchain integration.
Platforms like Ripple, Stellar, and Hedera were explicitly designed with ISO 20022 in mind, making it easier to map financial messages onto smart contract calls or on-chain token transfers.
Post-migration, the blockchain developers and central bank digital currency (CBDC) projects building tomorrow’s payment rails look to ISO 20022 as the canonical data model enabling interoperability.
Instead of each platform inventing its own fields, the standard provides a shared vocabulary that makes translation possible.
Banks Embrace Blockchain—Different Paths to Adoption
As banks sunset the MT format, they aren’t just swapping the old standard for a new one.
They’re also experimenting with new blockchain-based rails that use ISO 20022 to bridge financial ecosystems.
Perhaps the most significant development is the move toward tokenized deposits.
From JPMorgan to UBS, financial institutions worldwide are bringing commercial bank money on-chain at a rapidly accelerating pace.
According to Citi’s latest projection, tokenized deposits could support up to $140 trillion in annual transaction volume by 2030, surpassing stablecoins as the most popular medium of on-chain currency exchange.
For its part, SWIFT is looking to secure its role in the emerging financial order by integrating new forms of money and tokenized assets into its existing framework.
Other players using blockchain technology to upgrade the global banking system include Ripple, Partior, Fnality, and various multi-CBDC architectures being explored by central banks.
In each case, ISO 20022 functions as a neutral, richly structured description of a payment or securities transaction.
This allows banks to keep their core payment engines and compliance tools consistent, even as settlement hops between different rails.
Whether firms move tokenized deposits, stablecoins, CBDCs, or old-school fiat via SWIFT, a blockchain network, or some alternative platform, ISO 20022 helps ease data conversion and minimize friction.
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James Morales is CCN’s blockchain and crypto policy reporter. He has been working in the news media since 2020, writing about topics such as payments, banking and financial technology. These days, he likes to explore the latest blockchain innovations and the evolving landscape of global crypto regulation.
With an educational background in social anthropology and media studies, James uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.
