Icelandic króna will become the fifth currency available for instant settlement through TARGET services starting in 2028, following an agreement between ECB and Seðlabanki Íslands.
The European Central Bank (ECB) and Seðlabanki Íslands 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 settling retail payments instantly using the Eurosystem’s 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, “We are delighted that more and more European countries, including from outside the European Union, are joining the Eurosystem’s TARGET Services. This reinforces the integration of Europe’s financial infrastructures, supports its strategic autonomy, brings economies of scale, and strengthens economic relations.”
Seðlabanki Íslands’s Governor Ásgeir Jónsson commented, “This is an important step in modernising Iceland’s payments landscape and ensuring it is fit for the future. Joining TIPS will strengthen both the security and efficiency of instant payments in Iceland, enhance the resilience of our payment infrastructure, align our processes with SEPA practices, and allow Iceland to benefit from the scale and expertise of the Eurosystem’s TARGET Services.”
TARGET Services are developed and operated by the Eurosystem and facilitate transfers between banks, businesses, and individuals using central bank money. They are designed to support transactions in currencies other than the euro.
TIPS is a retail payment settlement system that enables banks and payment service providers to offer real-time fund transfers 24/7, every day of the year.
