The testing is scheduled to run over the coming year and will “allow participants to prepare for a smooth migration to the new system, which is scheduled to launch in November 2022.”
In order to start testing the new T2 platform, participants “needed first to connect to the system and submit their registration forms to the relevant central bank, as explained in the TARGET registration and onboarding guide,” the announcement explained.
Other supporting documents for users are the Terms of reference for user testing and the Mandatory Test Cases for T2 Participants, which are “published on the ECB’s website.” Further technical details on the testing conditions “will be shared on the ECB’s website in early December 2021,” the update confirmed.
The new real-time gross settlement (RTGS) system T2 will “replace the current TARGET2 system in November 2022, as part of the T2-T2S consolidation project.” The project also “brings optimized liquidity management which will allow participants to steer, manage and monitor central bank liquidity across all TARGET Services.”
TARGET2 is the real-time gross settlement (RTGS) system that is “owned and operated by the Eurosystem.” Reserve banks and commercial banks are able to submit payment orders in euro to TARGET2, where they are “processed and settled in central bank money, i.e. money held in an account with a central bank.”
TARGET2 settles payments “related to the Eurosystem’s monetary policy operations, as well as bank-to-bank and commercial transactions.”
Every five days, TARGET2 processes “a value close to the entire euro area GDP, which makes it one of the largest payment systems in the world.” Over 1,000 banking institutions reportedly use TARGET2 to “initiate transactions in euro, either on their own behalf or on behalf of their customers.” Taking into account branches and subsidiaries, over 52,000 banks worldwide and all their customers “can be reached via TARGET2.”
In response to changing market needs, theEurosystem has launched “a review of its RTGS services.”
The objective is to “consolidate the technical and functional aspects of TARGET2 and T2S, with the aim of improving efficiency and reducing operating costs.”
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