ECB Reveals Instant Payment System,"Better" than Blockchain
Mersch, an executive board member of the European Central Bank (ECB), told Bloomberg that the organization is getting ready to launch a new settlement system known as Target Instant Payment Settlement (TIPS), which he suggests can outperform blockchain.
Mersch elaborated on the competitive features of TIPS by saying “TIPS is 10 seconds, 0.2 cents. DLT transactions are at best 30 euros and take at least one hour. We have a mandate for efficient payment systems, and we go for efficiency. We are not bound to a technology; we are bound to results.”
In fact, immediate settlements do not only bring payments up to speed with other areas of a consumer’s life (news, emails…) but also engender economic benefits from the instant use of the received money. Currently, settlements in the euro area take up to 24 hours.
At the same time, Mersch admitted that TIPS is still in its early stages, which marks blockchain’s advance on the ECB, in addition to the high-tech and top financial talent who are attracted by the crypto culture.