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European Central Bank unveils an Instant Payment System

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Photo Credits: TheMerkle - A euro sign sculpture stands illuminated in front of the European Central Bank (ECB) headquarters in Frankfurt, Germany, on Thursday, Oct. 23, 2014. At noon in Frankfurt on Oct. 26, investors will learn which of the currency bloc's 130 biggest banks fell short in the ECB's year-long examination of their asset strength and ability to withstand economic turbulence. Photographer: Martin Leissl/Bloomberg
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The European Central Bank (ECB) has unveiled an Instant Payment System which they claim it’s ‘Better’ than Blockchain.

 

The world is just recognizing the countless applications of blockchain technology, not to mention the speed, security and simplicity at which transactions can be completed, and Yves Mersch of Luxembourg has suggested he’s got something that can run circles around it. Mersch, an executive board member of the European Central Bank (ECB), told Bloomberg the organization is readying a new settlement system dubbed Target Instant Payment Settlement, or TIPS, for its November debut, which he suggests leaves blockchain in the dust.

TIPS (not to be confused with US Treasury Inflation Protected Securities) is a product of a knee-jerk reaction among policymakers and regulators to create something that competes with blockchain, with the purpose of offering real-time payment transactions to disrupt the disrupter, if you will, of distributed ledger technology and digital coins.

Mersch, in a separate Bloomberg article, is quoted as acknowledging the connection between what he described as the virtual and physical worlds, saying a “collapse” of the former could trigger a liquidity event in the latter. As a result, cryptocurrencies and the underlying blockchain have captured their attention.

Crypto Culture

Yves Mersch – Photo source: ecb.europa.eu

Mersch touted the features of the new blockchain rival. “TIPS is 10 seconds, 0.2 cents. DLT transactions are at best 30 euros and take at least one hour,” he said, adding that the ECB is more result-driven than technology focused, which he alleges gives it an edge. Policymakers were more engaged than usual in the new technology, no doubt for the unexpected competition that blockchain has introduced.

But there are other alternatives to bitcoin, such as Ripple’s XRP for payments, not to mention the bitcoin-accelerating Lightning Network’s famous pizza transaction.

The fact that the supposed next iteration of a decentralized blockchain is being unveiled by a centralized bank will no doubt raise some eyebrows among participants in the cryptocurrency community. But it also shows the influence that blockchain is having on the establishment, with central bankers finally addressing payments and settlement, which till now has been a cumbersome and antiquated process that’s failed to keep up with the rest of technology.

For his part, Mersch admitted that TIPS is in the early stages, which only underscores blockchain’s headstart on the ECB, not to mention the high-tech and top financial talent who have been educated at Ivy League universities and worked at top Wall Street firms drawn to the crypto culture, including rising stars.

Meanwhile, cryptocurrencies are expected to be in focus at the forthcoming G20 meeting of monetary policymakers and finance ministers, which is to be held in Buenos Aires in March.

Sources: ccn.com and bloomberg.com

Zoltán is a self-taught publisher and events organizer who has developed several brands and services that have increased the notoriety of his company within multi-billion dollar industries. In 2018, he has become a TEDx speaker and talked about reputation management in the digital era. As Co-Founder of HIPTHER Agency, Zoltan has helped develop highly respected online news portals, virtual and in-person conferences that cater to multiple industries on 5 continents. Among the developed brands and services you can find online news portals that cover several tech industries, gaming, blockchain, fintech, artificial intelligence, and more. In parallel, the company has built a portfolio of annually organized boutique-style conferences in Europe and North America. All the events organized by his company focus on bringing a wealth of information about the latest innovation in several industries such as Entertainment, Technology, Gaming and Gambling, Blockchain, Artificial Intelligence, Fintech, Quantum Technology, Legal Cannabis, Health and Lifestyle, VR/AR, eSports and many more. Zoltan enjoys writing articles on all portals owned by the HIPTHER Agency, talking at conferences, hosting the weekly HIPTHER Talks Podcast, and loves spending time with his family. Zoltan is a duathlete who enjoys training for different international competitions which include running and cycling.

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