Sweden's Riksbank has published a staff memo analysing the financial stability risks associated with fast or instant payments and the ways these risks are currently managed in Sweden, including through settlement of instant payments in central bank money via RIX-INST. The authors emphasise that while instant payments change the shape and timing of familiar risks, they should not be treated as a barrier to further development. The memo distinguishes key risk trade-offs by settlement method. Real-time settlement largely eliminates credit and settlement risk but increases liquidity risk because participants must fund unexpected flows continuously, whereas deferred net settlement reduces real-time liquidity needs but introduces credit and settlement risk between settlement cycles, typically managed through frequent cycles, caps, transaction limits, pre-funding, and loss-sharing arrangements. In Sweden, RIX-INST settles payments one-by-one in real time using the European TARGET Instant Payment Settlement (TIPS) technical infrastructure and provides tools to mitigate liquidity stress, including near 24/7 liquidity transfers between RIX-INST and RIX-RTGS, real-time balance visibility, and automated transfer options. The memo also highlights operational and cyber risks that can be amplified by “always-on” processing and multi-actor payment chains, alongside concentration risks around key services, and notes that recent changes allowing payment service providers and e-money institutes to apply for participation raise additional considerations where non-bank actors may not have access to intraday or overnight credit. Fast payments through RIX-INST are expected to increase, with the standard settlement model open to participants beyond Swish since November 2024, and the Riksbank is preparing cross-currency settlement functionality within Europe between euros, Swedish kronor, and Danish kroner. The memo is published as staff analysis and is explicitly not a statement of the Riksbank’s policy position.
Riksbank 2025-05-20
Sweden's Riksbank publishes staff memo on financial stability risks in instant payments and how RIX-INST manages them
Sweden's Riksbank released a memo analyzing financial stability risks linked to instant payments via RIX-INST with real-time settlement in central bank money. It outlines risk trade-offs between real-time and deferred net settlements, highlighting liquidity, operational, and cyber risks, and notes increased participation and cross-currency settlement plans. It clarifies that the analysis is not an official policy statement.