Iceland to Join ECB’s Instant-Payments Platform, Bringing the króna to TIPS in 2028

The European Central Bank and Seðlabanki Íslands, Iceland’s central bank, signed an agreement on Tuesday to bring the Icelandic króna onto the Eurosystem’s instant-payments platform from 2028, extending the reach of Europe’s central-bank settlement infrastructure beyond the euro area. Once live, the króna will become the fifth currency available on TARGET Instant Payment Settlement, or TIPS.

TIPS is the Eurosystem’s retail payment settlement service, designed to let banks and other payment providers move money in real time around the clock. The ECB says the system settles transactions in central-bank money 24 hours a day, seven days a week, every day of the year, and processes payments in under 100 milliseconds.

The move places Iceland in a broader multicurrency expansion of the ECB-run platform. TIPS already supports the euro, Sweden’s krona and Denmark’s krone, while the Norwegian krone is also due to join in 2028. Sweden became the first non-euro country on the system in February 2024, followed by Denmark in April 2025. Norway signed its participation agreement in November 2024.

The agreement is notable because Iceland is outside both the euro area and the European Union, making this more than a technical upgrade inside the bloc’s single currency system. It means Icelandic banks and payment service providers will be able to settle instant króna payments on the same type of central-bank infrastructure already used for other European currencies.

“We are delighted that more and more European countries, including from outside the European Union, are joining the Eurosystem’s TARGET Services,” ECB President Christine Lagarde said in the ECB’s press release announcing the agreement.

Ásgeir Jónsson, governor of Seðlabanki Íslands, said the deal was “an important step in modernising Iceland’s payments landscape and ensuring it is fit for the future.”

Iceland had signaled its interest earlier. On Sept. 9, 2024, Seðlabanki Íslands said it was launching a feasibility assessment into adopting the Eurosystem’s TARGET Services, starting with TIPS. Tuesday’s agreement turns that preparatory work into a formal path toward instant settlement in Icelandic króna from 2028.

TIPS was launched on Nov. 30, 2018, as the Eurosystem’s pan-European service for settling instant retail payments. Its growing list of currencies comes as use of the platform has increased sharply. According to the ECB’s TARGET Services Annual Report 2025, TIPS transaction volumes rose from about 1.35 billion in 2024 to roughly 2.47 billion in 2025.

For Iceland, the practical change is straightforward: from 2028, participating banks and payment firms will be able to settle instant domestic payments in króna using central-bank money on the same shared infrastructure that is increasingly being adopted across Europe.