the receiving commercial bank can therefore be assured that it is receiving risk - free money. payments in the sic system are thus final and irrevocable and contribute to confidence in the payment system. settlement in central bank money creates a stable core in the payments system, around which innovative customer solutions and new technologies can flourish. the third principle is that payment systems, payment solutions and forms of money should be integrated as seamlessly as possible ( cf. slide 3 ). this means there needs to be a high degree of interoperability : it must be possible to exchange swiss francs seamlessly and one - to - one across different forms of money and payment systems. a lack of interoperability leads to frictions which result in higher costs and time delays and thus limit the usability of money. the three principles – a two - tier system, settlement of payments in central bank money, and seamless integration within the ecosystem – are well - established and, at the same time, necessary requirements for a well - functioning payment system. payments are currently undergoing extensive change, both in switzerland and around the world. what are the main challenges posed by this transformation? challenges arising from innovation and change the first challenge is the increased speed demanded for payments ( cf. slide 4 ). fintech and bigtech companies are responding to widespread customer demand for ever faster and more convenient payment solutions. these companies have developed innovative solutions using technologies such as artificial intelligence, machine learning, and high - speed data processing. in a fast - moving world, the ability to analyse data in real time is of paramount importance. this has led to a data revolution in the financial industry, which is also reflected in payment services. the second challenge is to enable interoperability between old and new technologies, such as distributed ledger technology – dlt for short. dlt makes it possible to represent and manage assets such as money and securities on a shared system of ledgers. in principle at least, this means that traditional financial institutions are no longer required for making payments. it is too early to speculate where all this is going. what is clear, however, is that innovation should ideally thrive in a way that does not jeopardise the security and efficiency of the sic system is operated by six interbank clearing ltd on behalf of the snb. page 4 / 11 payments. this requires a common vision for the swiss financial centre – a swiss payments vision. to make this vision a reality, we must find ways to enable

hub, central banks around the world are experimenting with how to connect instant payment systems across borders. examples include project nexus and the linking of payment systems between india and singapore. as a result of these benefits, we at the snb are convinced that an immediate and final transfer of value in cashless payment systems between end users will become the new standard. until now, cash was the only way this was possible for end users. page 5 / 11 when will instant payments be launched in the swiss market? before instant payments can be launched, the payment system infrastructure needs to be upgraded ( cf. slide 6 ). this has been under way for some time. during the course of this year, the sic system itself will become instant payment - capable. and from august 2024, the largest commercial banks active in retail payment transactions will be offering their customers the possibility of receiving instant payments. however, for instant payments actually to be available to commercial banks ’ end customers, private sector solutions are still needed. according to surveys, many commercial banks are also planning to offer the possibility of sending instant payments from august 2024 onward. competition among commercial banks should ensure that efficient payment solutions are offered to end customers, for example in ebanking. what do instant payments mean for the two - tier financial system? instant payments settled in central bank money are an example of how our first principle – the division of labour between the central bank and the private sector in the two - tier financial system – enables successful implementation of innovations. with the introduction of instant payments, the end customers of sic participants will also be able to settle their payments securely, quickly and in central bank money. in switzerland, the irrevocable and secure transfer of value in central bank money in real time has to date only been possible for participants directly connected to the sic system. this expansion of the group of participants brought about by instant payments corresponds to our second principle : the secure settlement of payments in central bank money. what about our third principle, the seamless integration of payment methods and forms of money? it is precisely here that we find the most significant innovation prompted by instant payments. private money that end customers hold at commercial banks is seamlessly linked to the central bank money held by commercial banks via instant payments. this integration enables retail payments to be settled in real time and in central bank money. the snb is aware that the implementation of instant payments at commercial banks presents not only opportunities, but also challenges and costs. perhaps the biggest challenge