15 December 2017
visit www.avoka.com

Swift role in Target2 up for grabs; ECB ponders blockchain prospects

16 February 2016  |  13307 views  |  0 euro

Interbank payments network Swift may lose its status as the sole network supplier to the European Central Bank's Target2 real-time gross settlement (RTGS) platform as the Eurosystem enters consultation on the future for payments and settlement across the eurozone.

The European Central Bank is contemplating a merger of the Target2 real-time gross payment system with the T2S securities settlement mechanism, providing a single platform for the processing of cash and securities across the Eurosystem.

In the consultation paper, the ECB says that bringing the two platforms together could allow Target2 to benefit from the multi-currency capability of T2S, the possibility of accessing the platform via different network service providers or the extensive and systematic usage of ISO20022 standards.

The Central Bank says that the decision to select Swift as the sole network provider for Target2 in 2004 was motivated by time constraints and the preference of market participants for a system to which they were already connected.

"As a consequence Target2 relied heavily on a number of specific/proprietary solutions developed by Swift (e.g. InterAct, FileAct, RBAC roles)," notes the ECB.

For T2S, the ECB went to public tender to select two network providers - ultimately won by Swift and SIA/Colt - in order to provide a network agnostic solution and drive competition in the market.

Technical consolidation of the two platforms would enable a similar outcome, suggests the ECB, robbing Swift of its monopoly status and introducing further competition between network providers and improved resilience.

Other issues addressed by the paper include the emergence of new technologies, including blockchain-based innovations.

"As part of its vision, the Eurosystem intends to assess their relevance for the different services it provides to the banking communities (payments, securities settlement as well as collateral)," states the document. "This investigation will identify opportunities that these new technologies may provide, as well as the challenges that they create."

The ECB is inviting input from market participants on the proposals, with a view to holding an open information session in Frankfurt on 22 March.

read the full paper:» Download the document now 210.2 kb (PDF File)

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

ECB eyes up European P2P payments

ECB eyes up European P2P payments

02 February 2016  |  14107 views  |  6 comments | 30 tweets | 41 linkedin
ECB goes back to drawing board to draft new T2S timetable

ECB goes back to drawing board to draft new T2S timetable

18 December 2015  |  7377 views  |  0 comments | 7 tweets | 10 linkedin
ECB posits combination of Target2 and T2S on single platform

ECB posits combination of Target2 and T2S on single platform

14 October 2015  |  8508 views  |  1 comments | 9 tweets | 8 linkedin
ECB plays down virtual currency risks

ECB plays down virtual currency risks

03 March 2015  |  9052 views  |  0 comments | 15 tweets | 13 linkedin
ECB fingers systemically important payment systems for oversight

ECB fingers systemically important payment systems for oversight

21 August 2014  |  10866 views  |  0 comments | 8 tweets | 10 linkedin
ECB hails launch of Target2

ECB hails launch of Target2

20 November 2007  |  9550 views  |  0 comments

Related company news

 

Related blogs

Create a blog about this story (membership required)
visit www.aciworldwide.comvisit www.solutions.lexisnexis.comvisit www.thomsonreuters.info

Top topics

Most viewed Most shared
Deutsche Bank paper hails 'huge' blockchain potentialDeutsche Bank paper hails 'huge' blockchai...
10177 views comments | 16 tweets | 25 linkedin
satelliteRipple completes XRP Lockup
9245 views comments | 3 tweets | 2 linkedin
PSD2: Laying the regulatory foundation for a new age in paymentsPSD2: Laying the regulatory foundation for...
8886 views comments | 17 tweets | 36 linkedin
Alior Bank to use Open API platform and accelerator to create fintech marketplaceAlior Bank to use Open API platform and ac...
7580 views comments | 20 tweets | 11 linkedin
Australian Government amends AML rules to cover digital currenciesAustralian Government amends AML rules to...
7204 views comments | 15 tweets | 24 linkedin

Featured job

Competitive
Germany, Austria or Switzerland

Find your next job