Danish TARGET DKK payment system updated, handles kr. 830bn daily
Danmarks Nationalbank has updated its TARGET DKK payment infrastructure, detailing its components and adherence to international principles. The system, now connected to TARGET Services, handles over kr. 830 billion in transactions daily.
A new era for Danish payments
Danmarks Nationalbank has significantly updated its TARGET DKK payment infrastructure, a collective term for the Danish payment and settlement system.
This system now comprises TARGET Services, the Eurosystem's platform, and Danmarks Nationalbank's own system for collateral and monetary policy instruments, SPI.
TARGET DKK plays a central role in the Danish financial infrastructure, settling payments in Danish kroner in real time and handling over kr.
830 billion in transactions daily, including kr.
97 billion in interbank payments.
The update, detailed in a disclosure report, outlines TARGET DKK's adherence to international principles for financial market infrastructures set by CPMI-IOSCO.
Key changes since July 2021 include the phasing out of cash settlement of securities transactions, the connection to the European payment platforms T2 and TIPS at Easter 2025, and the discontinuation of Straksclearingen.
The monetary policy day has also been shifted to open at 19:00 and close the following day at 17:00. The pricing model has been revised, now based solely on RTGS payments for direct participants, with the minimum monthly fee increasing from kr.
300 to kr.
1,000.
The mechanics of real-time settlement
TARGET DKK's architecture is built around TARGET Services, the European platform operated by the Eurosystem.
It integrates T2 for real-time gross settlement (RTGS) and liquidity management (CLM), T2S for securities settlement, and TIPS for instant payments.
Common Components provide overarching functions like master data administration and an emergency system.
Participants manage liquidity via Main Cash Accounts (MCA) in T2 CLM, which can link to Dedicated Cash Accounts (DCA) in T2 RTGS, T2S, and TIPS.
Intraday credit via a credit line on the MCA is administered from SPI, Danmarks Nationalbank's internal system for collateral and monetary policy instruments.
Direct participants access TARGET Services via ESMIG, while smaller banks can opt for co-management, where a co-manager administers their MCA.
European integration deepens
The comprehensive update of TARGET DKK marks a significant step towards modernizing Denmark's critical payment infrastructure.
By integrating with the Eurosystem's TARGET Services, Danmarks Nationalbank enhances the system's resilience, efficiency, and international alignment, crucial for handling its substantial daily transaction volumes.
This move underscores the ongoing trend of central banks leveraging shared platforms to strengthen financial stability and operational robustness across borders.