The European Central Bank is kicking off a project with Sverige Riksbank that will investigate whether and how Target Instant Payment Settlement (Tips) could support payment transactions across different currencies.
Tips is a service that settles payments in central bank money in real time and around the clock. It currently supports the settlement of instant payments in euro, but also has the functional capability to support other currencies.
The project with Sweden's central bank will begin this month with the first settlement of instant payments in Swedish kronor scheduled for May 2022.
The initiative comes as a response to the increasing consumer and business needs that stem from the growth of cross-border e-commerce, tourism and migration flows.
In practical terms, a Swedish consumer would be able to transfer funds in kronor to a retailer in any euro area country, with the payment received in euro in a matter of seconds. A customer in the euro area could transfer euro in payment for goods in Sweden in the same way.
Other countries, with other currencies, that join the Tips platform could also benefit from cross-currency instant payments, states the ECB.
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