Instant cross-currency payments
The ECB and the Riksbank are examining the potential to use the ECB's TIPS platform to implement instant payments between European currencies, such as the krona and the euro.
The Riksbank has previously decided to launch the service RIX-INST on the ECB’s TIPS platform. RIX-INST will enable financial institutions to settle payments in real time in Swedish krona. Read more on the page New service in RIX for instant payments.
At present it is only possible to settle payments in the same currency on the TIPS platform, that is, the sender of the payment and the recipient of the payment must have accounts in the same currency. The increased international interest in cross-border and cross-currency payments has meant that the Riksbank and the ECB started work in autumn 2020 on examining whether the TIPS platform could also be used for the settlement of payments between different currencies, in a preliminary step between the euro and the Swedish krona.
A study of the legal and operational frameworks for this type of settlement is underway. For the Riksbank and the institutions that will be participants in the future RIX-INST service, this means that technology, processes and operations need to be adjusted and developed.
The Riksbank is consulting the market as part of the study on immediate cross-currency payments. The purpose of the consultation is to obtain the market’s views on whether such a service, can increase the efficiency and safety of payment traffic, what the needs of the market are, and what is important to take into account in the design of the service.
The conclusions of this consultation will be included in the material to be presented to the ECB Governing Council and the Executive Board of the Riksbank in autumn 2022, prior to a possible decision to proceed with the development of a service for the settlement of instant cross-currency payments.
Participants in the RIX system, the Swedish Banking Association, P27 and Getswish AB have been invited to respond to the consultation, but other stakeholders are also invited to submit their comments, no later than 22 February 2022.
More efficient international payments
Offering cross-currency settlement services in real time in central bank money under European auspices could make an important contribution to the modernisation of retail payments in Europe. This initiative is being taken against a backdrop of increased European integration and ongoing international work to remedy the lack of fast, efficient and easily available cross-border payments.