Banca d'Italia will participate in the Bank for International Settlements Innovation Hub (BISIH) Nexus Project to carry out an experimental proof of concept for connecting instant payments systems. Tests will be conducted on the pan-European platform TIPS (TARGET Instant Payment Settlement), created and operated by Banca d'Italia on behalf of the Eurosystem; these tests are designed to make instant payments towards similar systems managed by the Malaysian Central Bank and the Monetary Authority of Singapore.
The experiment, in which the European Central Bank participates as an observer, will close on October 31 2022. The initiative is part of the workstream for improving cross-border payments that the G20 Saudi Presidency launched in 2020 and the Italian Presidency has continued in 2021; its purpose is to improve the efficiency, transparency and awareness of the costs of cross-border transactions. Banca d'Italia is involved in all the workstreams (Building Blocks) stemming from this G20 initiative.
TIPS was born as a multi-currency system, where payments can be executed in currencies other than the euro. Studies on carrying out cross-currency payments, i.e. with different currencies used in the same transaction, are at an advanced stage. Sveriges Riksbank will incorporate the Swedish krona into TIPS in 2022, while Danmarks Nationalbank and Norges Bank are considering doing the same for their currencies. Banca d'Italia and the Arab Regional Payments Clearing and Settlement Organization (ARPCSO) recently carried out a proof of concept in which their instant payments platforms (TIPS and BUNA) made cross-currency transactions.
The instant payments platform that Banca d'Italia operates on behalf of the Eurosystem is recognized as a benchmark for all countries applying to join the European Union.
