Iceland joins TIPS for instant payments in króna from 2028

The European Central Bank (ECB) and Seðlabanki Íslands have signed an agreement for Iceland to join the Eurosystem’s TARGET Instant Payment Settlement (TIPS) system. This will enable instant settlement of payments in Icelandic króna in central bank money starting from 2028.

The Icelandic króna will be the fifth currency available for retail instant payments via TARGET Services. Currently, the euro, Swedish krona, and Danish krone are available, with the Norwegian krone scheduled to join in 2028.

ECB President Christine Lagarde stated, “This reinforces the integration of Europe’s financial infrastructures, supports its strategic autonomy, brings economies of scale, and strengthens economic relations.”

Seðlabanki Íslands Governor Ásgeir Jónsson commented, “Joining TIPS will modernise Iceland’s payments landscape, improve security and efficiency, and align with SEPA practices, while benefiting from the Eurosystem’s scale and expertise.”

TARGET Services are developed and operated by the Eurosystem, relying on central bank money to facilitate transfers between banks, businesses, and individuals. They are capable of hosting transactions in currencies other than the euro.

TIPS is a retail payment settlement system that enables banks and payment providers to offer real-time fund transfers 24/7, every day of the year.