European central banks to advance instant payments between currencies

The three financial institutions are now encouraging European banks to participate in the initiative to allow instant payments between different currencies. Initially, the ECB, the Riksbank, and the Danmarks Nationalbank, which offer the underlying infrastructure for the transactions, are set to provide payments between EUR, Swedish Krona (SEK kr), and Danish Krone (DKK kr). However, banks and businesses are required to develop services to allow instant cross-currency payments to be made by other organisations and individuals.

The announcement comes a few months after the Riksbank revealed that its payment system, RIX-INST, was set to support a broader variety of instant payments beyond Swish transactions. The move enabled the Riksbank’s payment system to deliver instant payments similar to Swish transactions. At that time, the central bank offered the foundational infrastructure, with the decision to include additional instant payment services to the public and businesses lying with the banks connected to RIX-INST.

Optimising instant payment services

Commenting on the news, representatives from the Riksbank underlined that the central bank has been working on simplifying conducting payments between different currencies. Also, the G20, which is an intergovernmental forum comprising 19 sovereign countries, the EU, and the African Union, has a worldwide objective of making cross-currency payments more secure, efficient, and cost-effective. By focusing on TIPS cross-currency and supporting cooperation between central banks and the market, the financial institution intends to advance this goal. The Riksbank encouraged Swedish banks to express their interest in participating in this initiative. As per the information detailed in the official press release, financial institutions that intend to join the cooperation can sign a Letter of Intent, with the deadline for replies being 28 February 2025.

Furthermore, Norges Bank aims to join TIPS in 2028, in turn opening the possibility of TIPS cross-currency payments that support the Norwegian Kroner (NOK kr). The ECB is also looking into enabling transactions between currencies outside Europe by linking TIPS with other similar international instant payment systems.