The ECB’s governing council approved the launch of the assessment, and the ECB will work with the Central Bank of Brazil to assess technical, operational, legal and business considerations around the potential interlinking of TIPS and Pix, according to the release.
“In view of the significant economic flows between the euro area and Brazil, an interlinking of the two payment systems could facilitate faster and lower-cost instant payments between the two regions,” the ECB said in the release.
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This assessment joins some other initiatives in which the Eurosystem is exploring linking TIPS to other fast payment systems around the world. These include the Nexus Global Payments network launched by the Bank for International Settlements, the Unified Payments Interface (UPI) instant payments system developed by the National Payments Corporation of India and regulated by the Reserve Bank of India, and the Swiss Interbank Clearing instant payments system developed by the Swiss National Bank, according to the release.
“These efforts align with the Eurosystem’s comprehensive payments strategy, which envisages advancing the integration of global cross-border payments by improving the existing infrastructure,” ECB said in the release.
Reuters reported Sept. 3 that the ECB confirmed claims that the ECB and the Central Bank of Brazil were considering linking their instant payment systems. That report said that a pilot project could be launched in 2028 and that a linking of TIPS and Pix would mark the first cross-border expansion of Pix, which dominates payments in Brazil.
Reuters reported in August that the Central Bank of Brazil sounded more certain than in the past that it will link Pix to similar instant payment systems in other countries.
The PYMNTS Intelligence report “Digital Developments: Charting Digital Payment Growth in Latin America” found that Pix has achieved unprecedented growth, has become one of Brazil’s most preferred payment methods and has helped instant payments become table stakes in Latin America.
PYMNTS reported in May 2020 that the ECB created TIPS to build a more streamlined, interoperable Pan-European instant payments rail and that the central bank was taking active measures to expand the TIPS infrastructure beyond the eurozone.
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