The European Central bank is implementing a cross-currency settlement service on the Eurosystem's Target Instant Payment Settlement (Tips) service.
The service will allow instant payments originating in one Tips currency to be settled in another Tips currency and in central bank money. Initially, euro, Swedish kronor and Danish krone will be available for settlement.
The work to improve cross-currency payments in Tips has been ongoing since 2020, with the Riksbank and Denmark's Nationalbank playing an active role.
“It is very positive that we have now come so far that we will actually be able to provide a functional infrastructure for cross-currency payments," says Erik Thedéen, Governor of the Riksbank. "The decision supports the global goals within the G20 to make cross-border payments cheaper, faster, and more secure. It is now up to the market to create the services that the general public demands.”
The European push aligns with a more ambitious project to connect domestic real-time networks across borders beyond the EU. The Eurosystem on Tuesday announced that it would commence exploratory work on integrating Tips with Project Nexus, a Bank for International Settlement initiative designed to provide a centralised single connection to instant payment networks across the world, using ISO 20022 message specifications and a suite of purpose-built APIs.