Investigation into the Riksbank’s future settlement services

Increasing internationalisation, where banks and others are active on several markets, increases the requirements for harmonisation and thus also the use of common standards. Additionally, there is a need for payment systems to manage increasingly large amounts of data and to be able to interact with other systems. Another challenge is the operational risks that arise when the financial infrastructure is used by an increasing number of actors, at an increasingly fast pace and at a greater distance. This development leads to greater demands with regard to security (especially cyber security) and robustness in the systems, to ensure they are resilient to attacks and maintain a high degree of continuity. Additionally, the Riksbank needs to manage the requirements of the market and society regarding cost-effective and safe system solutions.

One solution to meet these challenges can be for several central banks to share technical platforms. This means that costs and resources for development, maintenance and security can be shared and create economies of scale. On these grounds, the Executive Board of the Riksbank has decided that the Riksbank will continue to investigate and work towards a possible use of the T2 and T2S platforms supplied by the Eurosystem.

Before the Riksbank can take a decision on entering into contractual negotiations with the Eurosystem, a more in-depth analysis is needed of a number of questions related to the Eurosystem’s platforms and the Riksbank’s tasks. The analysis is planned to continue until the middle of 2024.

What is T2?

T2 is the Eurosystem’s technical platform for the settlement of high-value payments in EUR. The platform was put into operation in March 2023, replacing the earlier TARGET2 platform. T2 has the capacity to manage further currencies and it is therefore possible for the Riksbank to make use of the platform for the settlement of high-value payments and payments from the financial infrastructure in SEK. The in-depth analysis includes, for instance, an analysis of what adjustments would be appropriate to ensure the service meets the needs of the Swedish market, and the Riksbank's need to be able to implement monetary policy instruments and measures. It also includes questions linked to security protection and back-up solutions.

What is T2S?

T2S (TARGET2 Securities) is the Eurosystem’s platform for securities settlement. If the Riksbank chooses to provide SEK on the platform, it means that settlement transactions in securities against SEK will be made in T2S. This means that central securities depositories such as Euroclear Sweden will need to use T2S for their securities clearance in SEK. The in-depth analysis will therefore also include the impact of a potential connection on Euroclear Sweden's operations.

In addition to T2 and T2S, the Eurosystem also supplies TIPS, which is a platform for the settlement of instant payments. The Riksbank has been connected to TIPS via RIX-INST since May 2022.