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Photo: European Central Bank / Twitter
TIPS is a new market infrastructure service launched by the ECB this month. It allows payment service providers to offer their customers the ability to transfer funds in real time and 24 hours a day, every day of the year. This means that thanks to TIPS, individuals and companies will be able to transfer money to each other within seconds, regardless of the opening hours of their local bank.
TIPS is developed as an extension of TARGET2 and will settle payments in the central bank currency. Although at the beginning they said that TIPS will only transfer payments in euros, it was the phrase that, in the event of a request, other currencies could also be supported.
Some of the advantages of the system will not include a minimum wait during the transaction process and the surprising fact of the immediate payment system is that it allows the currency to be deposited in the bank at any time by creating an access system at all times.
The alleged partner of Ripple and the pan-European infrastructure, Target Instant Payment Settlement are now live with the main purpose of creating an immediate payment system across Europe using the central bank as a channel to regulate the transfer of settlements that allows the digital money transmission across the border and Europe as a whole. And since the term "instant payment" is attached to the service, multiple anonymous sources have reported that they have turned to Ripple blockchain.
Some consider this as the beginning of the end for cryptographic assets: centralized institutions are responding to the challenges posed by the crypt and are beginning to act. Others, however, see it as promising for cryptography.
The only thing is certain. This is certainly a good thing for cryptocurrency and decentralization. In fact, it could be a turning point for Ripple's various payment technologies because there are signs that TIPS could implement Ripple technologies such as xCurrent, xVia and xRapid in the future.
The first two are powered by Ripple, while the third is powered by the XRP digital token. TIPS may use some or all of these technologies to facilitate international low-cost payments. The reason is that Ripple has partnered with TAS Group which has several major partnerships with banks in Europe.
Its latest version of the Bank Liquidity Management platform is specifically designed to offer maximum interoperability with the TIPS payment standard. Banks can use the TAS Group Bank Liquidity Management Platform to seamlessly switch to the new TIPS payment protocol.
Why are TIPS similar to Crypto?
TIPS works similarly to payment platforms such as Ripple & # 39; s xCurrent. With TIPS, payment service providers are required to set aside part of the liquidity in their country's central bank. This liquidity will be used to settle payments instantly without waiting times, 24 hours a day and 365 days a year.
The end-to-end processing time from the start of the transaction to the end is expected in 10 seconds or less. The system already has plans to scale effectively to meet the needs of users.
ECB Board Member Benoît Cœuré described TIPS's benefit in a speech at the start of this year:
"In fact, in the euro area, where different legal frameworks and customer habits prevail, there is always the risk of a new fragmentation deriving from the development of national or closed-circuit solutions that are not interoperable. To counter this risk, the European payment industry is launching a truly pan-European instant payment system. "
There are two TIPS features that will help you reach reachability across Europe. Firstly, TIPS is based on the SEPA Instant Credit Transfer (SCT Inst) – a pan-European instant payment scheme, which should be used by a large number of payment service providers across Europe. Secondly, TIPS will be developed as an extension of TARGET2, which already has a large network of participants across Europe.
Although you use the euro for liquidation, this will be one of the most significant milestones that could ever happen in euro technology in the digital currency world. The involvement of Ripple blockchain has yet to be confirmed, but the nodes match quite well.
For more information on the XRP currency, the Ripple company and their innovative solutions, see our fantastic guide.
