A new European initiative has now been introduced in order to improve instant payments between different currencies. The European Central Bank (ECB) is now launching an initiative aimed at making it easier for companies to develop services for making instant payments between different currencies.
Initially, payments will be possible between euros, Swedish kronor, and Danish kroner.
A project that examines the possibility of making payments between currencies outside the EU will also be initiated.
The cross-currency payments will be settled on the Target Instant Payments Settlement (TIPS) platform.
The Riksbank’s payment system RIX-INST, which settles instant payments in Swedish kronor, is already “connected to TIPS.”
This reportedly enables both companies and organizations that have joined RIX-INST to utilize the cross-currency service.
Today, for instance, all Swish payments are said to be settled in RIX-INST.
In connection with the decision by the ECB to launch the service, a decision was also made to explore the “possibilities of making payments between currencies outside the EU.”
In practice, this means examining whether it is possible to “connect TIPS with other similar systems” that are based outside the European Union.
The ongoing work to enhance cross-currency payments in TIPS has been ongoing since 2020, with the Riksbank and Danmarks Nationalbank reportedly playing an “active role.”
Erik Thedéen, Governor of the Riksbank, said that it is quite positive that they have now come so far that they will actually be able to provide “a functional infrastructure” for cross-currency payments.
Erik added that the decision supports the global goals within the G20 to make cross-border payments cheaper, faster, and more secure.
Erik also mentioned that it is now up to the market to “create the services that the general public demands.”
At the beginning of October 2024, the Riksbank had reportedly held an information meeting to which they invited participants from banking institutions and other market participants to talk about TIPS and the service for cross-currency payments.
The Riksbank confirmed that it will continue to have a productive dialogue with the market on how both firms as well as private individuals may access services that provide “fast” and cost-effective cross-currency payments.
