Monday, December 3, 2018

Don Quijones — ECB Just Launched “Better Than Blockchain” Instant Payments System

On Friday the ECB launched, with minimal fanfare, a brand new system aimed at enabling banks to settle payments instantaneously across Europe, helping them to compete with PayPal and other global tech giants. Developed in little over a year, the ECB’s not-for-profit TARGET Instant Payment Settlement (TIPS) system will let people and businesses in Europe transfer euros to each other almost instantly, at extremely low cost, and irrespective of the opening hours of their local bank....
Wolf Street
ECB Just Launched “Better Than Blockchain” Instant Payments System
Don Quijones

4 comments:

Andrew Anderson said...

Developed in little over a year, the ECB’s not-for-profit TARGET Instant Payment Settlement (TIPS) system will let people and businesses in Europe transfer euros to each other almost instantly, at extremely low cost, and irrespective of the opening hours of their local bank. Don Quijones [bold added]

Not Euros, but mere liabilities for Euros between their local banks.

But will the big banks play along? Don Quijones

Who needs banks anyway when everyone could have simple debit/checking accounts at the Central Bank itself - for FREE for individual citizen accounts up to a reasonable limit.

Andrew Anderson said...

Who needs banks anyway ... aa

Even truly private banks with truly voluntary depositors could serve a legitimate/honest role as loan intermediaries and/or investment banks.

André said...

"Not Euros, but mere liabilities for Euros between their local banks."

Why do you say that?

If I could understand right, TIPS involves the transfer of bank reserves.

Andrew Anderson said...

Good catch, André!

Yes, reserves (Euros in account form) are transferred but NOT from, say, individual A's account at the Central Bank to individual B's account at the Central Bank since such accounts are not allowed.

Instead, the reserves are transferred from individual A's bank's account at the CB to individual B's bank's account at the CB.

Then the corresponding banks adjust A's and B's account balances which are, of course, mere liabilities for fiat, not fiat itself.

In short, only banks may use real money; us peons may only use private bank deposits except for grubby, unsafe, inconvenient physical fiat, aka "cash."