Instant Payments: Sweden Completes Initial Phase of Migration to TIPS

Sveriges Riksbank has successfully completed the initial phase of the migration to TARGET Instant Payment Settlement (TIPS).

As noted in the announcement, this paves the way for “the instant settlement of payments in Swedish kronor in TIPS.”

The first phase included establishing “a connection between the Swedish real-time gross settlement (RTGS) system RIX and the Eurosystem’s TIPS.”

The connection is “a prerequisite for funding and defunding the accounts of future Swedish participants in TIPS.”

In the second phase, the Swedish market will “test the TIPS platform in order to prepare for final migration in the course of the first quarter of 2023.”

TIPS currently only “settles payments in euro.”

However it was designed and developed “to allow settlement in central bank money in several currencies.”

Sveriges Riksbank is the first non-euro area central bank “to join the TIPS platform with its currency, leveraging on this feature.”

The central banks of Norway and Denmark have also “expressed an interest in joining TIPS with their respective national currencies in order to offer instant payment settlement in central bank money to their respective communities.”

For additional information, you can check out Sveriges Riksbank’s update here.

TIPS is a pan-European service “for settling electronic payments instantly.”

It is offered by the Eurosystem to banks and payment service providers and “operates on a 24/7/365 basis.”

The service uses central bank money “to facilitate transfers between individuals and businesses within seconds, irrespective of the opening hours of their local bank.”

The Eurosystem, which comprises the European Central Bank and the national central banks of the Member States whose currency is the euro, “is the monetary authority of the euro area.”

As noted in the update:

“We in the Eurosystem have as our primary objective the maintenance of price stability for the common good. Acting also as a leading financial authority, we aim to safeguard financial stability and promote European financial integration.

In pursuing our objectives, they “attach utmost importance to credibility, trust, transparency and accountability.”

They aim for effective communication “with the citizens of Europe.”

They are committed “to conducting our relations with European and national authorities in full accordance with the Treaty provisions and with due regard to the principle of independence.”

They jointly “contribute, strategically and operationally, to attaining [their] common goals, with due respect to the principle of decentralization.”

They are committed “to good governance and to performing [their] tasks effectively and efficiently, in a spirit of cooperation and teamwork.”

Drawing on the breadth and depth of our experiences as well as on the exchange of know-how, they aim “to strengthen our shared identity, speak with a single voice and exploit synergies, within a framework of clearly defined roles and responsibilities for all members of the Eurosystem.”

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