What is a unique feature of TIPS compared to other instant payment systems?

The unique feature of TIPS (Target Instant Payment Settlement) compared to other instant payment systems is its use of central bank money. TIPS is designed to facilitate instant payments in euros, settling transactions in central bank money, which provides several advantages, including enhanced security and reliability. Using central bank money minimizes credit risk, as transactions are settled in an asset that is guaranteed by the central bank, thereby ensuring that the funds are safe and readily available.

Other payment systems may not utilize central bank money and could rely on private sector settlements, which can introduce various risks and complexities. This distinction makes TIPS particularly suited for high-value transactions and for use in a controlled regulatory environment, as the participating banks can settle transactions instantly with finality.

The other characteristics, such as upper limits on payments, operation through multiple currencies, or transaction speed, may apply to various payment systems but do not specifically define TIPS as uniquely as the use of central bank money.