What is Target2 primarily used for?

Target2 is primarily used for settling payments in real time, specifically within the Eurozone. It is a real-time gross settlement (RTGS) system that enables financial institutions to process large-value transactions efficiently and securely across different European countries. The system ensures that payments are settled instantly, which enhances the liquidity of the banking system and reduces the risks associated with transactions, such as credit risk.

This real-time capability is crucial for maintaining the stability and efficiency of the financial markets, allowing for immediate transfer of funds between banks, which is essential for large value and time-sensitive payments. The other options, while related to financial activities, do not align with the specific function of Target2, focusing instead on areas like cryptocurrency, small business loans, or consumer refunds, which are not its primary purpose.