The European Central Bank is set to introduce a cross-currency settlement service on the Eurosystem’s Target Instant Payment Settlement (TIPS) platform.
This new service will facilitate instant payments that originate in one TIPS currency and settle in another, using central bank money. Initially, the currencies available for settlement will include the euro, Swedish kronor, and Danish krone.
Discussions around enhancing cross-currency payments within TIPS have been ongoing since 2020, with active contributions from the Riksbank and Denmark’s Nationalbank.
Erik Thedéen, Governor of the Riksbank, expressed optimism about the progress made, stating, “It is very positive that we have now come so far that we will actually be able to provide a functional infrastructure for cross-currency payments. The decision supports the global goals within the G20 to make cross-border payments cheaper, faster, and more secure. It is now up to the market to create the services that the general public demands.”
This initiative aligns with broader ambitions to connect domestic real-time payment networks beyond the EU. Recently, the Eurosystem announced the beginning of exploratory work to integrate TIPS with Project Nexus, an initiative by the Bank for International Settlements aimed at providing a centralized connection to instant payment networks worldwide, utilizing ISO 20022 message specifications and a suite of specialized APIs.