The European Central Bank (ECB) and Danmarks Nationalbank agreed for Denmark to join the ECB’s T2 wholesale payment system and the TARGET Instant Payment Settlement (TIPS) service. This will facilitate the settlement of high-value payments in euro and Danish kroner in the T2 system and will make the Danish krone the third currency available for settlement in TIPS after the Swedish krona was included earlier this year.
Danish financial market participants have started testing both systems in preparation for the launch in April 2025. Danmarks Nationalbank already uses the T2 system for settling payments in euro and has used the TARGET2-Securities (T2S) platform for settlement of securities in both euro and kroner since October 2018.
The inclusion of the Danish krone in the Eurosystem’s payment services will enable market participants in Denmark to use all three TARGET services to settle all payments and securities in their national currency and to benefit from optimized liquidity management.
ECB president Christine Lagarde said in a statement: “This will reinforce the integration of Europe’s financial infrastructures beyond the euro area, bring economies of scale and lay the foundation for cross-currency payments, providing tangible benefits for people in the euro area and in Denmark.”
Danmarks Nationalbank governor Christian Kettel Thomsen, said in a statement: “We are very happy to join T2 and TIPS, and thereby be the first non-euro country to be part of all current TARGET services, offering strengthened IT security and harmonized infrastructure for the Danish financial market.”
TARGET Services are developed and operated by the Eurosystem and rely on central bank money to facilitate transfers between banks, businesses and individuals. The multicurrency capabilities of TARGET Services were first activated for the T2S platform when Danmarks Nationalbank joined with the Danish krone in October 2018. TIPS, which operates around the clock, already settles instant payments in two currencies, the euro and the Swedish krona.