January 25, 2021

Denmark to join Eurosystem’s Target2 payment platform

Denmark’s central bank has applied to join the European Central Bank’s (ECB) Target2 payment system, the Eurosystem’s new real-time gross settlement system (RTGS).

T2 would then include the Danish krone by November 2025. Danmarks Nationalbank has also expressed interest in joining Target Instant Payment Settlement (TIPS) within the same time frame.

The inclusion of the Danish krone in the Eurosystem’s payment platforms will enable market participants in Denmark to use T2 and TIPS services and to settle payments in both euro and Danish krone.

Denmark flag

T2 would then include the Danish krone by November 2025.

T2 and TIPS services support transactions in different currencies, as is the case for the current Target2-Securities (T2S) system.

Securities settlement in Danish krone has been available on the T2S platform since October 2018. With the participation of Danmarks Nationalbank, payments in Danish krone will also be possible in TIPS and T2.

The connection to TIPS will allow Danish banks and providers of payment services to settle payments in both currencies within seconds.

TIPS uses central bank money to facilitate transfers between individuals and businesses, irrespective of the opening hours of their local bank.

TIPS was launched in November 2018 to settle instant payments in euro. However, other currencies can be supported as well.

See also: ECB blames Target2 outage on third-party vendor