Central banks across Europe are taking action to facilitate instant payments between countries and currencies.
The latest initiative has come from the European Central Bank (ECB), the Swedish central bank Riksbank, and the Danish central bank Danmarks Nationalbank. Initially, payments will be possible between euros, Swedish kronor and Danish kroner. However, while the central banks are providing the infrastructure for these payments, banks and businesses must now develop services to take advantage of them.
Specifically, the Riksbank has put out a call to Swedish banks inviting them to participate in the ongoing work. This will include discussions on the design of the Target Instant Payment Settlement (TIPS) system, the system facilitating instant payments across countries, and actual testing of it.
Banks can express their interest in participating in the cooperation by signing a Letter of Intent. The deadline for replies is 28 February 2025.
“The Riksbank has long been working to make it easier to make payments between different currencies. In addition, the G20 has a global goal of making cross-currency payments more secure, more efficient and cheaper. The work on TIPS cross-currency is an important step towards making this a reality but it also requires cooperation between central banks and the market. We are therefore keen for Swedish banks to express their interest in participating in this work,” says Per Jansson, deputy governor of the Riksbank.
In 2028, Norges Bank is planning to join TIPS, opening up the possibility that TIPS cross-currency may also support payments in Norwegian kroner in the future. At the same time, the ECB is exploring the possibility of enabling payments between currencies outside Europe by linking TIPS with other similar international instant payment systems.
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