Iceland Joins Eurosystem’s TIPS for Instant Payments

Iceland joins Eurosystem’s TIPS for instant payments payment intermediation financial stability international cooperation Listen

The Central Bank of Iceland has signed an agreement with the ECB for Iceland to join the Eurosystem’s TARGET Instant Payment Settlement system (TIPS). This will allow payments in Icelandic krónur to be settled instantly, in central bank money, as of 2028.

The Icelandic króna will be the fifth currency available in TIPS. The other currencies are the euro, the Swedish krona, the Danish krone and, effective in 2028, the Norwegian krone.

TIPS is part of the Eurosystem’s TARGET services. It is a system providing for instant interbank payment settlement, which is used increasingly by households and businesses on a daily basis. TIPS is based on settlement in central bank money. The system is designed with emphasis on security, efficiency, and coordinated execution of cross-border payments.

Iceland’s participation in TIPS will enhance the operational security of Iceland’s payments landscape by using efficient infrastructure that meets increasing requirements for security, speed, reliability, and access to payment services. For the public, this means primarily that domestic interbank payments in Iceland – for instance, between individuals, and between individuals and companies – will be carried out using more robust and coordinated infrastructure, enabling payments to be transmitted swiftly and securely year-round, 24 hours a day.

Alongside the implementation of TIPS, a domestic contingency solution will also be introduced, which can be activated in case TIPS should become temporarily inaccessible. This promotes greater continuity of critical financial services and reduces operational risk in domestic payment intermediation.

Participation in TIPS supports continued development and greater efficiency of payment services in Iceland and will replace the current system for real-time settlement of interbank payments. This will bring Iceland’s payment processes into line with international standards and will enable the Icelandic financial market to benefit from the shared technology, operational security, and economy of scale offered by the Eurosystem’s TARGET services.

The European Central Bank also published a press release on Iceland’s participation in TIPS alongside the signing of the agreement:
Iceland joins TIPS for instant payments
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