--- title: "Iceland Payments Regulation Monitor | World Payments Monitor" canonical: https://payments.gi/jurisdictions/iceland/ source_html: /jurisdictions/iceland/index.html description: "Iceland payments and e-money regulation: 14 modules, 60 sourced findings, updated 2026-10-26. Licensing, safeguarding, stablecoins, AML/CFT." generated_at: 2026-10-26T19:20:26Z content_sha256: 764b9df4b0f701dc8f3fb37c049b0824407ea385d6f93cd7fab2207c89438a6c generator: "fe-fleet/md-twin@1.0" --- # Iceland IS schema world-payments-v1 trajectory: not yet assessed Last updated 2026-10-26 · 14 modules · 60 sourced findings · 123 sources in the cumulative register Download report (PDF) Expand all 14 Modules 3 Moved this cycle 1 Key judgments 3 Open gaps 60 Findings 17 Tier-1 sources Confidence mix 9 confirmed 5 unpopulated (sums to 14 rendered modules; click to filter) 3 modules moved this cycle Law made at European Economic Area level that applies in Iceland is covered once, on the [European Economic Area](/jurisdictions/european-economic-area/) page. This page covers Iceland’s own layer: implementation, national authorities, national options and local enforcement. ## Jurisdiction brief Jurisdiction lead brief 1,400 Full executive summary 574 ###### Latest update · 25 October 2026 #### Lead Signal Iceland's virtual-asset services market has consolidated around a single authorised provider following the entry into force of the country's new licensing regime. The Central Bank of Iceland granted Myntkaup ehf a licence as a virtual-asset service provider on 25-26 June 2026 under Act nr. 101/2025, making it the first and, as of October 2026, the only authorised crypto-asset service provider in the jurisdiction. The milestone matters less for the single grant than for what happened around it: Iceland's prior second-largest crypto exchange, IsMynt ehf, ceased operations rather than pursue authorisation ahead of the 1 July 2026 transitional deadline, converting client balances back to ISK. Read together, the authorisation and the exit describe a market being actively thinned by a compliance bar that at least one established operator judged unclearable. #### Other Developments Iceland's digital-money landscape also carries a standing fact worth restating for readers tracking euro-area stablecoin issuance: Monerium ehf, an Icelandic electronic money institution, issues EURe as an e-money token under the EU's Markets in Crypto-Assets framework. The associated white paper was notified on 9 January 2026, and the token is backed one-to-one by reserves held in segregated accounts or qualifying highly liquid assets. Monerium's Icelandic domicile means the Central Bank of Iceland sits as competent authority for this issuance, placing the jurisdiction inside the EU's token-issuance perimeter even though Iceland sits outside the EU itself. On payment infrastructure, the European Central Bank and the Central Bank of Iceland have signed an agreement bringing Iceland into the TARGET Instant Payment Settlement system, with the krona due to settle instantly in central bank money from 2028. Iceland would become the fifth currency on TIPS after the euro, Swedish krona and Danish krone, aligning the country's domestic payment rails more closely with euro-area instant-settlement practice well ahead of the 2028 go-live. #### Cross-Monitor Connections The licensing consolidation in the virtual-asset sector carries an illicit-finance dimension that sits outside this monitor's remit: the compliance bar that pushed IsMynt out of the market is, by construction, also a financial-crime control, and that angle is tracked separately rather than analysed here. #### Outlook The near-term question for Iceland's licensing regime is whether Myntkaup remains the sole authorised operator through the remainder of 2026 or whether further applications clear the bar the Central Bank has now demonstrated it will enforce. On infrastructure, the multi-year runway to 2028 for TIPS membership gives banks and payment service providers time to adapt settlement arrangements, but the agreement itself is now a fixed point against which future preparatory milestones can be measured. 3 earlier updates not shown here. ###### Standing brief · as of 4 July 2026 Written before the update above. Where they differ, the update is the more recent position. #### Lead Signal Iceland's payments landscape enters this monitoring baseline defined by a single dominant infrastructure event: the 24 June 2026 agreement between the European Central Bank and Seðlabanki Íslands for Iceland to join TIPS, the Eurosystem's instant-payments settlement service. The agreement itself is signed and confirmed by two independent T1 sources — the ECB and the Banque de France — but its operational effect is not immediate: ISK payments are set to settle instantly in central bank money from 2028, meaning this is a forward-dated infrastructure commitment rather than a completed accession. This distinction matters because earlier framing in the underlying research characterised the milestone as a completed 2026 accession; that has been corrected in this cycle to reflect the signed-agreement-now, operational-in-2028 reality. Once live, the shift will extend Eurosystem TARGET Services central-bank-money settlement to Icelandic payment service providers for the first time, a structural change to how ISK and EUR payments clear domestically and cross-border. The lead signal sits alongside a second, closely related structural concern: the International Monetary Fund's Financial Sector Assessment Program has flagged Iceland's near-total dependency of its two major acquirers on Visa and Mastercard debit processing as a system-wide operational-resilience vulnerability with potential financial-stability implications. That concentration risk is itself a downstream consequence of the 2020-21 wave of foreign-ownership transitions that saw Iceland's three domestic card-payment companies — Borgun, Valitor and Korta — pass into the hands of Teya (formerly SaltPay) and Rapyd. The Central Bank of Iceland has voiced explicit concern about this foreign-owned card infrastructure, and it is this same concern that is driving a parallel CBI-led exploration, coordinated through the Forum for the Future group and involving the National Security Council, of an independent domestic retail payment rail as a resilience hedge. The TIPS accession and the card-network dependency question are therefore two faces of the same underlying story: Iceland is simultaneously opening a new, sovereign-controlled settlement channel while working to reduce reliance on foreign-owned card rails. #### Other Developments Iceland's Digital Operational Resilience Act position has also been clarified and corrected this cycle. DORA applied EU-wide from 17 January 2025, and the EEA Joint Committee adopted the decision incorporating DORA into the EEA Agreement on 20 February 2025; the exact date on which it enters into force for Iceland depends on the country lifting outstanding constitutional requirements, and a previously circulated "1 November 2025" in-force date could not be corroborated against primary EFTA or EIOPA sources and has accordingly been removed from the baseline position. The Central Bank of Iceland remains the sole supervisor of cyber and operational risk in the financial sector, coordinating industry resilience through the CBI-led SURF forum, with core-payment-system migration work now nearly complete. On the legal and enforcement side, two matters have concluded. Iceland's Supreme Court refused Landsbankinn leave to appeal after the Court of Appeal acquitted the Borgun/Teya purchaser entities of all damages claims, closing out long-running acquiring-sector litigation with Landsbankinn ordered to pay costs. Separately, the Financial Supervisory Authority within the Central Bank fined Fossa fjárfestingarbanki ISK 22 million (approximately €153,000) on 9 May 2025 for inadequate, non-ongoing sanctions screening and other anti-money-laundering lapses — the first publicised sanctions-related enforcement action of its kind in Iceland. On market structure, the Icelandic Competition Authority's 2025 merger-clearance file confirms that acquiring is now concentrated among four players — Rapyd, Teya, Kvika-subsidiary Straumur and Landsbankinn — with Straumur alone handling roughly a quarter of Iceland's payment transactions across more than 1,700 merchants through its January 2024 partnership with Adyen. On the digital-money front, Iceland has no bespoke stablecoin statute, and MiCA remains pending incorporation into the EEA Agreement, with the EFTA Surveillance Authority still evaluating that step; in its absence, the practical basis for euro-pegged digital money in Iceland continues to be Monerium's EMI-licensed EURe token, built on the same blockchain e-money licence — the world's first of its kind, granted by Iceland's former FME in 2019 — that anchors Iceland's broader nonbank digital-money position. Consumer protection continues to rest on a split architecture: FME/CBI for financial-sector conduct, the general Consumer Agency for broader consumer legislation, and the Data Protection Authority, empowered to fine up to €20 million or 4% of turnover for payment-data mishandling. No mandatory authorised-push-payment fraud reimbursement scheme comparable to the UK's PSR regime was identified in any of this material, leaving general consumer law and the European Consumer Centres Network as the operative redress channels for cross-border disputes. #### Cross-Monitor Connections The Fossa fjárfestingarbanki sanctions-screening and AML enforcement action, and the underlying Act No. 140/2018 AML/CFT regime it sits within — supervised by the FME within the CBI, backstopped by an independent Financial Intelligence Unit within the District Prosecutor's Office, and recently upgraded on Iceland's FATF recommendation compliance — carry illicit-finance and sanctions-compliance significance that sits outside this monitor's payments-instrument scope. Those findings, sourced through the Sentinel feed rather than original WPM analysis, have been routed to the Financial Intelligence Monitor for AML/sanctions-specific follow-up; this monitor's role is limited to noting where payment-instrument regulation and enforcement intersect with that separate illicit-finance workstream, not to conducting illicit-finance analysis itself. #### Outlook The defining forward marker for Iceland's payments environment is the 2028 operational date for TIPS-based instant ISK settlement in central bank money, a milestone the regulatory horizon tracker places in the "in force pending" stage, with interim testing and migration steps not yet detailed in available ECB or CBI material. Watch for interim announcements on that migration path, for further movement on Iceland's exact DORA in-force date once constitutional requirements are confirmed lifted, and for any concrete steps in the CBI's exploratory work on a domestic retail payment rail, which remains the structural counterweight to continued foreign-owned card-network concentration. Read full brief · 1400 words ###### Latest update · 25 October 2026 #### Regulatory Status Iceland's payments and digital-asset regulatory position moved on two fronts. Under Act nr. 101/2025, the Central Bank of Iceland granted Myntkaup ehf authorisation as a virtual-asset service provider on 25-26 June 2026, the first grant under the new regime and, as of October 2026, the only one. The 1 July 2026 transitional deadline that accompanied this authorisation also triggered an exit: IsMynt ehf, previously Iceland's second-largest crypto exchange, ceased operations after failing to obtain a licence, converting client funds to krona. Separately, Monerium ehf continues to issue EURe as a Markets in Crypto-Assets e-money token from its Icelandic base, white paper notified 9 January 2026, with the Central Bank of Iceland as competent authority and reserves backed one-to-one. On payment infrastructure, the European Central Bank and the Central Bank of Iceland have agreed that Iceland will join the TARGET Instant Payment Settlement system, with krona settling instantly in central bank money from 2028, the fifth currency to do so after the euro, Swedish krona and Danish krone. #### Outlook Iceland's near-term trajectory combines a licensing regime now shown to be selectively enforced, a standing euro-token issuance programme anchored by Monerium, and a multi-year infrastructure commitment to instant settlement that will reshape domestic payment rails well before its 2028 effective date. 2 earlier updates not shown here. ###### Standing brief · as of 4 July 2026 Written before the update above. Where they differ, the update is the more recent position. #### Regulatory Status Iceland's payments regulatory architecture is anchored in Act No. 114/2021 (the PSD2 transposition) and the Act on Financial Undertakings No. 161/2002, both administered by the Central Bank of Iceland following the 2020 merger of the former standalone Financial Supervisory Authority into the CBI; EEA passporting is the dominant market-access route, alongside domestic EMI/PI/credit-institution licensing illustrated by Monerium's pioneering blockchain e-money licence. Operational resilience is escalating as the defining theme: DORA applied EU-wide from 17 January 2025 and was adopted for EEA incorporation by the EEA Joint Committee on 20 February 2025, though Iceland's exact in-force date remains pending confirmation of constitutional completion, while the IMF has flagged Icelandic acquirers' concentrated dependency on Visa and Mastercard processing as a resilience risk. That risk sits directly behind two other live developments: the 24 June 2026 ECB-Seðlabanki Íslands agreement for Iceland to join TIPS, with ISK instant settlement in central bank money operational from 2028, and the near-total foreign-ownership transition of Iceland's card-acquiring sector to Teya and Rapyd since 2020-21, which has prompted explicit CBI concern and a parallel CBI-led exploration of an independent domestic retail payment rail. On enforcement, the Financial Supervisory Authority's May 2025 fine against Fossa fjárfestingarbanki for sanctions-screening and AML lapses is the most recent notable action, while the long-running Borgun/Teya damages litigation concluded in 2025 in the purchaser entities' favour. Iceland has no bespoke stablecoin statute or mandatory APP-fraud reimbursement scheme; both gaps are treated as genuine regulatory absences rather than research coverage failures, with Monerium's EMI-based EURe token and general consumer law functioning as the respective practical substitutes. #### Outlook Iceland's regulatory trajectory is best described as stabilising-but-escalating: the foreign-ownership consolidation of acquiring has largely stabilised under Competition Authority oversight, while DORA and TIPS integration are actively advancing operational resilience even as the underlying card-network concentration risk persists pending the domestic-rail initiative. The 2028 TIPS go-live and the exact Iceland DORA in-force date are the two clearest forward markers to track across the jurisdiction. Read full brief · 574 words × 14 of 14 modules Signal Moved Judgment Gap Density Comfortable Compact Expand all sources Reset all Selections OR within a group, AND across groups. Press / to search. ### W1aLicensing, Authorisation & Market Accessmoved1 judgmentConfirmedconfirmed 2026-07-04▾# The Central Bank of Iceland remains the single consolidated supervisor for payment and e-money institutions under Act 114/2021 (PSD2) and for crypto-asset service providers under Act 101/2025 (MiCA). Myntkaup ehf was authorised as the first (and as of October 2026, only) Icelandic CASP on 25 June 2026; a competing exchange, IsMynt, ceased crypto operations after the Central Bank declined to authorise it ahead of the 1 July 2026 transitional deadline. Movement — CHANGED Myntkaup ehf CASP authorisation 25 June 2026; IsMynt exit New dated regulatory and market-structure facts located this cycle. Key judgment — Probable · impact ELEVATED Iceland's crypto-asset services market consolidated around a single authorised CASP in 2026, with the prior second-largest exchange exiting rather than seeking authorisation, indicating a high compliance bar under the new MiCA-derived regime. claims: wpm-2026-W43-001, wpm-2026-W43-002 Horizon · 2026-Q4 (± a quarter) Iceland MiCA CASP transitional period review (ongoing monitoring) In force · Tier 1 source Standing sub-brief · as of 4 July 2026 198 words · last cycle 2026-10-25 #### Licensing, Authorisation & Market Access Payment licensing and market access in Iceland is administered under Act No. 114/2021 on Payment Services, the PSD2 transposition, together with the Act on Financial Undertakings No. 161/2002, both supervised by the Central Bank of Iceland since the former standalone Financial Supervisory Authority merged into the CBI in 2020. EEA passporting remains the dominant route for foreign payment service providers to access the Icelandic market, alongside domestic licensing for both bank and non-bank entities. Iceland's most notable domestic licensing precedent is Monerium EMI ehf., which received the world's first e-money licence for blockchain-based issuance from Iceland's then-standalone FME in 2019, passportable EEA-wide and to third countries subject to approval. That licence anchors a bank-versus-non-bank distinction that recurs across Iceland's payments regulatory architecture: credit institutions and payment/e-money institutions operate under the same CBI-administered licensing regime, but the practical route into Icelandic digital-money markets for non-bank entities runs through the EMI authorisation Monerium first tested. #### Outlook No change to the underlying licensing statute is expected in the near term; the module remains stable, with continued EEA passporting activity and the Monerium precedent likely to remain the reference case for future non-bank e-money licensing in Iceland. Read full sub-brief · 198 words Periodic update · new data 2026-10-25 #### Licensing, Authorisation & Market Access Iceland's virtual-asset licensing regime, established under Act nr. 101/2025, moved from framework to operating practice in mid-2026. On 25-26 June 2026 the Central Bank of Iceland granted Myntkaup ehf a licence as a virtual-asset (crypto-asset) service provider, the first such authorisation issued under the Act. As of October 2026, Myntkaup remains the sole authorised crypto-asset service provider in the jurisdiction, meaning the regime's practical scope so far rests on a single supervised entity. The authorisation sits alongside a transitional deadline of 1 July 2026, after which only Central Bank-authorised entities may lawfully provide virtual-asset services in Iceland. The deadline produced a visible market consequence: IsMynt ehf, previously Iceland's second-largest crypto exchange, ceased operations after the Central Bank declined to grant it a licence, converting client balances to krona rather than continuing to trade. The sequence, one grant and one exit around the same compliance deadline, indicates that the new authorisation bar is being applied with real teeth rather than functioning as a formality for incumbents. #### Outlook Whether the market remains a single-licensee regime or broadens depends on further applications clearing the standard the Central Bank has now shown it will enforce. Continued monitoring through the remainder of 2026 will indicate whether Myntkaup's authorisation was a first mover's success or the ceiling of what the current applicant pool can achieve under Act nr. 101/2025. Evidence 5 Sources and findings (5) - T1[https://fastpayments.worldbank.org/sites/default/files/2023-08/World%20Bank%20FPS_Iceland_EXP_Case%20Study%20(1).pdf](https://fastpayments.worldbank.org/sites/default/files/2023-08/World%20Bank%20FPS_Iceland_EXP_Case%20Study%20(1).pdf) Applies beyond this jurisdiction (World Bank)retrieved 2026-07-04 - T2[https://www.mondaq.com/guides/results/10/199/all/iceland-fintech](https://www.mondaq.com/guides/results/10/199/all/iceland-fintech)retrieved 2026-07-04 - T1[https://cb.is/licenses/operating-licence-and-registration/operating-licences-of-credit-institutions/](https://cb.is/licenses/operating-licence-and-registration/operating-licences-of-credit-institutions/)retrieved 2026-07-04 - T3[https://payatlas.com/countries/iceland-is](https://payatlas.com/countries/iceland-is) - T2[https://monerium.com/press/20190614-emi/](https://monerium.com/press/20190614-emi/)retrieved 2026-07-04 ### W1bConduct, Safeguarding & Promotions1 gapProbableconfirmed 2026-07-04▾# Conduct-of-business and safeguarding obligations for Icelandic PSPs/EMIs sit within Act 114/2021's PSD2-derived framework, supplemented by GDPR-based data-protection duties and Consumer Agency oversight of general consumer legislation, with FME/CBI supervising financial-sector-specific conduct matters. Open gap — wpm-int-2 PSD3/PSR national transposition timeline for Iceland not located this cycle. no under-indexing note recorded Standing sub-brief · as of 4 July 2026 143 words · last cycle 2026-07-04 #### Conduct, Safeguarding & Financial Promotions Conduct-of-business oversight for Icelandic payment services is split across three institutions rather than concentrated in a single conduct regulator: the Financial Supervisory Authority, now folded within the Central Bank of Iceland, supervises financial-sector conduct matters, the general Consumer Agency covers broader consumer legislation, and the Data Protection Authority can fine payment-data mishandling up to €20 million or 4% of turnover. Secure customer authentication for payment services rests on Iceland's full implementation of the eIDAS Regulation 910/2014 through Act No. 55/2019, which underpins strong customer authentication infrastructure for PSD2-based services. These three strands together define the current conduct and safeguarding perimeter for both bank and non-bank payment service providers in Iceland. #### Outlook Expect continued reliance on the split FME/CBI-Consumer Agency-DPA architecture, with safeguarding-rule implementation the primary near-term conduct-compliance item to track for both bank and non-bank payment service providers. Read full sub-brief · 143 words no periodic updates on record for this sub-brief Evidence 4 Sources and findings (4) - T3[https://www.mondaq.com/technology/1674410/fintech-comparative-guide](https://www.mondaq.com/technology/1674410/fintech-comparative-guide)retrieved 2026-07-04 - T1[https://government.is/topics/consumer-affairs/](https://government.is/topics/consumer-affairs/)retrieved 2026-07-04 - T3[https://helpx.adobe.com/legal/esignatures/regulations/iceland.html](https://helpx.adobe.com/legal/esignatures/regulations/iceland.html)retrieved 2026-07-04 - T2[https://www.islandsbanki.is/en/product/services/financial-technology-and-open-banking](https://www.islandsbanki.is/en/product/services/financial-technology-and-open-banking)retrieved 2026-07-04 ### W2Stablecoins & Digital MoneymovedProbableconfirmed 2026-07-04▾# Iceland has no bespoke domestic stablecoin statute; crypto/DLT activity is lightly regulated and captured mainly via AML law. MiCA is not yet incorporated into the EEA Agreement for Iceland, leaving the existing EMI/e-money route (illustrated by Monerium's EURe token) as the practical basis for euro-pegged digital money. Movement — CHANGED Monerium EURe EMT notified under MiCA New standing stablecoin issuance fact located this cycle. Standing sub-brief · as of 4 July 2026 152 words · last cycle 2026-10-25 #### Stablecoins & Digital Money Iceland has no bespoke stablecoin or crypto-asset statute; digital-asset activity is captured mainly through the general AML Act (No. 140/2018), and MiCA remains pending incorporation into the EEA Agreement, with the EFTA Surveillance Authority still evaluating that step. In the absence of a MiCA-equivalent regime, the practical basis for euro-pegged digital money in Iceland is Monerium's EURe token, a fully regulated e-money instrument issued by licensed EMI Monerium and described as backed 1:1 by fiat reserves, though the precise safeguarding structure — trust versus segregated account — is not detailed in available material. This EMI-based route, rather than a bespoke stablecoin licence, is what fills the gap left by MiCA's non-incorporation for Iceland. #### Outlook Watch for the EFTA Surveillance Authority's evaluation of MiCA's EEA incorporation for Iceland; until that process concludes, Monerium's EMI-based EURe token will likely remain the sole practical euro-pegged digital-money instrument available under Icelandic authorisation. Read full sub-brief · 152 words Periodic update · new data 2026-10-25 #### Stablecoins & Digital Money Iceland hosts a standing euro-denominated token issuance programme operated by Monerium ehf, an Icelandic electronic money institution. Monerium issues EURe as an e-money token under the EU's Markets in Crypto-Assets framework, with its white paper notified on 9 January 2026. The token is backed one-to-one, with reserves held either in segregated accounts or in qualifying highly liquid assets, and the Central Bank of Iceland acts as competent authority for the issuance. The arrangement places Iceland inside the EU's token-issuance perimeter despite Iceland's position outside the European Union itself, reflecting the jurisdiction's participation in the European Economic Area framework that extends the Markets in Crypto-Assets regime's reach. For payment service providers and counterparties relying on EURe, the one-to-one backing requirement and the Central Bank's supervisory role are the operative facts governing the token's standing as regulated digital money in this jurisdiction. #### Outlook The issuance is an established, in-force fact rather than a pending development, and the near-term monitoring question is whether additional e-money tokens or stablecoin issuers seek authorisation from the Central Bank of Iceland following Monerium's template. Evidence 4 Sources and findings (4) - T3[https://theccpress.com/eu-mica-crypto-regulation-takes-full-effect-july-1](https://theccpress.com/eu-mica-crypto-regulation-takes-full-effect-july-1)retrieved 2026-07-04 - T2[https://www.mondaq.com/guides/results/10/199/all/iceland-fintech](https://www.mondaq.com/guides/results/10/199/all/iceland-fintech)retrieved 2026-07-04 - T3[https://www.innreg.com/blog/mica-regulation-guide](https://www.innreg.com/blog/mica-regulation-guide) - T2[https://monerium.com/press/20190614-emi/](https://monerium.com/press/20190614-emi/)retrieved 2026-07-04 ### W3Operational Resilience & Critical InfrastructureConfirmedconfirmed 2026-07-04▾# Iceland's central bank has agreed with the ECB to join the Eurosystem's TARGET Instant Payment Settlement (TIPS) system, with Icelandic-króna instant settlement in central-bank money going live in 2028 — a first-order infrastructure modernisation for a non-euro, non-EU EEA member. Kept on Dataprotection.gi, not restated here: data and cloud switching obligations on service providers, including notice periods and charges. [Open this jurisdiction's page on Dataprotection.gi →](https://dataprotection.gi/jurisdictions/iceland/) Standing sub-brief · as of 4 July 2026 181 words · last cycle 2026-09-05 #### Operational Resilience & Critical Infrastructure DORA applied EU-wide from 17 January 2025, and the EEA Joint Committee adopted the decision incorporating DORA into the EEA Agreement on 20 February 2025; Iceland's exact in-force date remains pending confirmation that outstanding constitutional requirements have been lifted, correcting an earlier, unverified '1 November 2025' date that could not be corroborated against primary EFTA or EIOPA sources. The Central Bank of Iceland is the sole supervisor of cyber and operational risk in the country's financial sector, coordinating industry resilience through the CBI-led SURF forum, and core-payment-system migration work is now nearly complete. Separately, the IMF's Financial Sector Assessment Program has flagged the concentrated dependency of Iceland's two major acquirers, Teya and Rapyd, on Visa and Mastercard debit processing as a factor reducing system-wide operational resilience with potential financial-stability implications. #### Outlook The exact Iceland DORA in-force date is the key item to track pending confirmation of constitutional completion, while the card-network concentration risk flagged by the IMF is likely to keep feeding directly into the CBI's parallel exploration of a domestic retail payment rail (see W9). Read full sub-brief · 181 words Periodic update · new data 2026-08-25 #### Operational Resilience & Critical Infrastructure Iceland's central settlement infrastructure is undergoing its most significant structural change in years. The European Central Bank and the Central Bank of Iceland (Sedlabanki Islands) have signed an agreement for Iceland to join TIPS, the ECB's instant-payment settlement service operating within TARGET Services, with the Icelandic krona becoming the fifth currency settleable through that infrastructure, effective 2028. This is confirmed by a Tier-1 European Central Bank press source, the highest-confidence sourcing available in this cycle's Iceland coverage, and represents first-order infrastructure modernisation for a jurisdiction that is an EEA member but neither an EU member state nor part of the euro area. The accession builds on an existing statutory and operational base rather than displacing it outright. Iceland's current Fast Payment System, known domestically as EXP/MBK, is regulated and operated solely by the Central Bank of Iceland, with Reiknistofa Bankanna (RB) serving as technical service provider; that system settles on a deferred-net-settlement basis. The legal basis for TIPS participation sits alongside Iceland's existing Rules No. 1030/2020 on the Central Bank of Iceland Interbank Payment System and Act No. 92/2019 on the Central Bank of Iceland, both confirmed via a Tier-1 Central Bank of Iceland source. The practical implication is a transition from deferred-net settlement to real-time settlement in central-bank money, executed through legal instruments that already exist within Iceland's payment-systems framework rather than requiring an entirely new statutory architecture. The bank/non-bank distinction is material to how this transition will land. TIPS accession and the underlying legal instruments are framed around the Central Bank of Iceland's role as system operator and RB's role as technical provider, both bank-centric infrastructure functions; the claims reached this cycle do not extend TIPS access or the accompanying legal framework to non-bank payment institutions or e-money institutions operating under Iceland's PSD2 transposition (Act No. 114/2021). Whether and how non-bank PSPs licensed by the Central Bank of Iceland's Financial Supervision division gain equivalent access to the upgraded settlement rail is not established in this cycle's sourcing, and should be treated as an open question rather than assumed parity with bank-channel access. This is an operational-resilience development in the architecture-over-incident sense: it is not a response to any single incident or vulnerability in Iceland's existing payment rails, but a structural upgrade to the settlement layer itself, undertaken jointly with the ECB on a multi-year runway. #### Outlook Between now and 2028, the operationally relevant questions are the pace and sequencing of Iceland's transition away from deferred-net settlement and the extent to which RB's role as technical service provider evolves once TIPS connectivity is live. No specific migration timetable beyond the 2028 effective date is available this cycle, and no sourcing reached this cycle addresses non-bank PSP access specifically. Icelandic banks and payment-service providers should expect a multi-year period in which EXP/MBK and TIPS-based settlement coexist as transition work proceeds. This is illustrative orientation on the operating environment, not a projection of the transition's technical milestones. Evidence 6 Sources and findings (6) - T2[https://www.mondaq.com/guides/results/10/199/all/iceland-fintech](https://www.mondaq.com/guides/results/10/199/all/iceland-fintech)retrieved 2026-07-04 - T1[https://www.elibrary.imf.org/view/journals/002/2023/280/article-A001-en.xml](https://www.elibrary.imf.org/view/journals/002/2023/280/article-A001-en.xml) Applies beyond this jurisdiction (IMF)retrieved 2026-07-04 - T1[https://www.elibrary.imf.org/view/journals/002/2023/280/article-A001-en.xml](https://www.elibrary.imf.org/view/journals/002/2023/280/article-A001-en.xml) Applies beyond this jurisdiction (IMF)retrieved 2026-07-04 - T1[https://www.elibrary.imf.org/view/journals/002/2023/280/article-A001-en.xml](https://www.elibrary.imf.org/view/journals/002/2023/280/article-A001-en.xml) Applies beyond this jurisdiction (IMF)retrieved 2026-07-04 - T1[https://www.elibrary.imf.org/view/journals/002/2023/280/article-A001-en.xml](https://www.elibrary.imf.org/view/journals/002/2023/280/article-A001-en.xml) Applies beyond this jurisdiction (IMF)retrieved 2026-07-04 - T1[https://www.elibrary.imf.org/view/journals/002/2023/280/article-A001-en.xml](https://www.elibrary.imf.org/view/journals/002/2023/280/article-A001-en.xml) Applies beyond this jurisdiction (IMF)retrieved 2026-07-04 ### W4Scheme & Network ComplianceProbableconfirmed 2026-07-04▾# No Iceland-specific interchange-fee or scheme statute distinct from general EEA-applicable rules was located; Icelandic acquirers and merchants are bound to PCI DSS and Visa/Mastercard scheme rules contractually via acquiring agreements. Standing sub-brief · as of 4 July 2026 105 words · last cycle 2026-07-04 #### Scheme & Network Compliance No Iceland-specific interchange-fee or scheme statute distinct from general EEA-applicable rules was identified; Icelandic acquirers and merchants are instead bound to PCI DSS and Visa/Mastercard scheme rulebooks contractually, through their acquiring agreements rather than through domestic legislation. This is a genuine regulatory gap rather than a research coverage failure, reflecting Iceland's general pattern of relying on EEA-wide and scheme-level rules in place of bespoke domestic scheme statutes. #### Outlook No change to this contractual, scheme-governed arrangement is expected; any future shift would most likely arrive via EU-level interchange or scheme regulation applied through the EEA Agreement rather than a domestic Icelandic initiative. Read full sub-brief · 105 words no periodic updates on record for this sub-brief Evidence 2 Sources and findings (2) - T2[https://www.pcisecuritystandards.org/standards/](https://www.pcisecuritystandards.org/standards/)retrieved 2026-07-04 - T3[https://www.pxp.io/payments-glossary/card-scheme-rules](https://www.pxp.io/payments-glossary/card-scheme-rules)retrieved 2026-07-04 ### W5Payment Corridor Dynamicsmoved1 gapConfirmedconfirmed 2026-07-04▾# The European Central Bank and Sedlabanki Islands have signed an agreement for Iceland to join the Eurosystem's TARGET Instant Payment Settlement (TIPS) system, with the Icelandic krona to be settled instantly in central bank money from 2028, the fifth currency on TIPS after the euro, Swedish krona and Danish krone, alongside Norway's planned 2028 entry. Movement — NEW Iceland to join TIPS for ISK instant settlement from 2028 New corridor/infrastructure development located this cycle. Open gap — wpm-int-1 No direct ECB/Sedlabanki press-release URL for the TIPS agreement was located this cycle. no under-indexing note recorded Horizon · 2028 (± a year) Iceland TIPS settlement go-live (ISK instant settlement in central bank money) Adopted, not yet in force · Tier 1 source Horizon · 2028 (± more than a year) Iceland joins TIPS instant-settlement system Adopted · Tier 1 source Horizon · 2028 (± a year) Iceland TIPS settlement go-live (ISK instant settlement in central bank money) Adopted, not yet in force · Tier 1 source Horizon · 2028 (± more than a year) Iceland ISK settlement via TIPS begins Adopted · Tier 3 source Standing sub-brief · as of 4 July 2026 144 words · last cycle 2026-10-25 #### Payment Corridor Dynamics Iceland's principal corridor infrastructure remains SEPA for EUR credit transfers and traditional SWIFT correspondent banking for non-EUR cross-border flows, with certain foreign transactions still reportable to the Central Bank of Iceland despite the lifting of currency controls. On 24 June 2026 the European Central Bank and Seðlabanki Íslands signed an agreement for Iceland to join TIPS, the Eurosystem's instant-payments settlement system; ISK payments will settle instantly in central bank money as of 2028, meaning this is a signed accession agreement rather than a completed 2026 milestone. The SEPA/SWIFT corridor will continue operating in parallel through the transition period leading up to TIPS's operational go-live. #### Outlook The corridor picture will remain unchanged in practice until 2028; watch for any interim ECB or Seðlabanki Íslands announcements on testing and migration phases ahead of the TIPS go-live, alongside continued SWIFT dependency for non-EUR flows. Read full sub-brief · 144 words Periodic update · new data 2026-10-25 #### Payment Corridor Dynamics Iceland's payment infrastructure is set for a structural shift in settlement arrangements. The European Central Bank and the Central Bank of Iceland have signed an agreement for Iceland to join the TARGET Instant Payment Settlement system, under which the krona will settle instantly in central bank money from 2028. This would make the krona the fifth currency carried on the system, following the euro, Swedish krona and Danish krone. The agreement brings Iceland's domestic payment rails into closer alignment with euro-area instant-settlement practice, extending a Eurosystem settlement capability to a currency outside the euro area itself. For banks and payment service providers operating in Iceland, the 2028 timeline establishes a fixed point for infrastructure and liquidity-management preparation, even though the multi-year runway means no immediate operational change is required. #### Outlook The period between now and 2028 is expected to be one of preparatory alignment rather than further structural announcements, with the agreement itself serving as the anchor against which implementation milestones will be measured as the start date approaches. 1 earlier distinct update(s) Periodic update · new data 2026-10-12 #### Payment Corridor Dynamics Iceland's payment corridor with the euro area is being restructured at the infrastructure level. On 24 June 2026, Seðlabanki Íslands and the European Central Bank signed a formal agreement under which Iceland will join TIPS (TARGET Instant Payment Settlement), the Eurosystem's pan-European instant-payment settlement system, with ISK settlement scheduled to go live from 2028. This is a corridor-defining development: TIPS enables instant, 24/7/365 settlement in central-bank money, and Iceland's accession places the krona alongside the Norwegian krone, which is scheduled to join the same platform in the same year, as the first non-euro Nordic currencies to settle directly on Eurosystem instant-payment rails. The arrangement is confirmed directly by the ECB's own press release announcing the agreement, and the fact pattern is corroborated independently by trade press (including the Paypers and Finextra), giving the finding a corroborated rather than single-sourced basis. The structural effect, once live, is to shorten the settlement chain for ISK-EUR payment flows: rather than routing through correspondent banking arrangements with their attendant intermediary steps and cut-off times, direct participants will be able to settle instantly in central-bank money on shared Eurosystem infrastructure. This is a material change to how the corridor functions, not a change to who may participate in it — access conditions, participant eligibility and domestic connectivity arrangements are matters still to be worked out in the run-up to the 2028 live date. It is worth being precise about what is confirmed and what remains ahead. The agreement itself, its signing date, and the 2028 target are Confirmed findings from a primary ECB source. What is not yet settled, and was not evidenced this cycle, is the detailed technical migration plan, the domestic connectivity model for Icelandic participants, or whether access will be direct or mediated through a settlement agent arrangement. Those are the open questions for the build-out period. #### Outlook Between now and 2028, expect the corridor's evolution to proceed through a sequence of technical and governance milestones rather than a single switchover event: scheme rulebook alignment, settlement-account provisioning between Seðlabanki Íslands and the Eurosystem, and testing windows for participant connectivity. Each of these is a natural point at which further confirmed detail should emerge. The corridor's eventual shift to instant, central-bank-money settlement is the structural story to track over the next several cycles; the open question is less whether it happens than how participant access is ultimately structured once it does. Evidence 4 Sources and findings (4) - T1[https://www.ecb.europa.eu/press/pr/date/2026/html/ecb.pr260624_1~ce8e85127f.en.html](https://www.ecb.europa.eu/press/pr/date/2026/html/ecb.pr260624_1~ce8e85127f.en.html) Applies beyond this jurisdiction (EU) - T1[https://www.banque-france.fr/en/press-release/iceland-joins-tips-instant-payments](https://www.banque-france.fr/en/press-release/iceland-joins-tips-instant-payments)retrieved 2026-07-04 - T3[https://enablebanking.com/docs/markets/is/](https://enablebanking.com/docs/markets/is/) - T2[https://www.landsbankinn.is/en/international-payments](https://www.landsbankinn.is/en/international-payments)retrieved 2026-07-04 ### W6Industry Structure & CommercialConfirmedconfirmed 2026-07-04▾# Iceland's financial sector is concentrated around three commercial banks and one investment bank; the acquiring/card-payments layer has passed almost entirely to foreign ownership (Teya, Rapyd) since 2020-2021, prompting explicit CBI concern, while a small but growing fintech/challenger-bank scene (indó, Kvika-affiliated Straumur) has emerged. Standing sub-brief · as of 4 July 2026 141 words · last cycle 2026-07-04 #### Industry Structure & Commercial Dynamics Iceland's card-payments and acquiring layer has passed almost entirely into foreign ownership since 2020-21, when the country's three domestic card-payment companies, Borgun, Valitor and Korta, were sold to SaltPay (now Teya) and Rapyd, prompting explicit Central Bank of Iceland concern about foreign-owned card infrastructure. A domestic counterweight has emerged in Straumur, a subsidiary of Kvika banki, which handles roughly a quarter of Iceland's payment transactions across more than 1,700 merchants and has partnered with Adyen as its card-acquiring bank since January 2024. The structure of the sector is therefore bifurcated between foreign-owned acquiring giants and a smaller but bank-affiliated domestic processor. #### Outlook Expect the foreign-ownership structure of acquiring to remain the baseline condition, with Straumur's bank-affiliated model and any CBI-backed domestic-rail initiative (see W9) the main levers available for shifting the balance back toward domestic control. Read full sub-brief · 141 words no periodic updates on record for this sub-brief Evidence 6 Sources and findings (6) - T2[https://www.trade.gov/country-commercial-guides/iceland-trade-financing](https://www.trade.gov/country-commercial-guides/iceland-trade-financing)retrieved 2026-07-04 - T3[https://www.icelandreview.com/news/economy/icelands-central-bank-concerned-about-foreign-ownership-of-card-payment-systems/](https://www.icelandreview.com/news/economy/icelands-central-bank-concerned-about-foreign-ownership-of-card-payment-systems/)retrieved 2026-07-04 - T3[https://www.paymentsdive.com/news/rapyd-buys-valitor-in-100m-deal/602775/](https://www.paymentsdive.com/news/rapyd-buys-valitor-in-100m-deal/602775/)retrieved 2026-07-04 - T3[https://fintech.global/2022/02/16/icelands-first-challenger-bank-indo-launches-from-stealth/](https://fintech.global/2022/02/16/icelands-first-challenger-bank-indo-launches-from-stealth/)retrieved 2026-07-04 - T3[https://tracxn.com/d/explore/fintech-startups-in-iceland/__giCu69LvGbU7cFiY4hLvCUsoy5wGpWrpeE17IyrEWRc/companies](https://tracxn.com/d/explore/fintech-startups-in-iceland/__giCu69LvGbU7cFiY4hLvCUsoy5wGpWrpeE17IyrEWRc/companies)retrieved 2026-07-04 - T3[https://ifbusiness.uk/icelands-fintech-revolution/](https://ifbusiness.uk/icelands-fintech-revolution/)retrieved 2026-07-04 ### W7Legal & LitigationConfirmedconfirmed 2026-07-04▾# The standing enforcement/litigation position centres on the CBI's first publicised sanctions/AML fine (Fossa fjárfestingarbanki, May 2025) and the long-running Landsbankinn v. Borgun/Teya damages litigation, which concluded in 2025 with the purchaser entities fully vindicated and Landsbankinn ordered to pay costs. Standing sub-brief · as of 4 July 2026 123 words · last cycle 2026-07-04 #### Legal & Litigation Two matters define Iceland's current payments legal and enforcement position. The Financial Supervisory Authority, within the Central Bank of Iceland, fined Fossa fjárfestingarbanki ISK 22,000,000 (approximately €153,000) on 9 May 2025 for compliance failings including inadequate, non-ongoing sanctions screening and other anti-money-laundering lapses, the first publicised sanctions-related enforcement action of its kind in Iceland. Separately, Iceland's Supreme Court refused Landsbankinn leave to appeal after the Court of Appeal acquitted the Borgun/Teya purchaser entities of all damages claims, concluding the long-running acquiring-sector litigation in 2025 with Landsbankinn ordered to pay costs. #### Outlook With the Borgun/Teya litigation now closed, the Fossa fine stands as the operative enforcement precedent; watch for whether it prompts broader sanctions-screening remediation activity across other Icelandic payment institutions. Read full sub-brief · 123 words no periodic updates on record for this sub-brief Evidence 4 Sources and findings (4) - T3[https://blogs.duanemorris.com/europeansanctionsenforcement/2025/08/13/iceland-bank-fined-for-sanctions-compliance-failings/](https://blogs.duanemorris.com/europeansanctionsenforcement/2025/08/13/iceland-bank-fined-for-sanctions-compliance-failings/)retrieved 2026-07-04 - T3[https://www.visir.is/g/20252691312d/lands-bankinn-for-fylu-ferd-i-lands-rett-vegna-borgunar](https://www.visir.is/g/20252691312d/lands-bankinn-for-fylu-ferd-i-lands-rett-vegna-borgunar)retrieved 2026-07-04 - T3[https://www.visir.is/g/20252726231d/borgunarmalinu-lokid-og-bankinn-faer-ekki-kronu](https://www.visir.is/g/20252726231d/borgunarmalinu-lokid-og-bankinn-faer-ekki-kronu)retrieved 2026-07-04 - T1[https://en.samkeppni.is/media/akvardanir-2025/Akvordun-9-2025.pdf](https://en.samkeppni.is/media/akvardanir-2025/Akvordun-9-2025.pdf)retrieved 2026-07-04 ### W8Merchant Acquiring & RiskProbableconfirmed 2026-07-04▾# Merchant acquiring in Iceland is concentrated among foreign-owned Teya and Rapyd plus Kvika's Straumur subsidiary and the three commercial banks; PCI DSS and scheme chargeback/dispute rules govern day-to-day operations, while the IMF has flagged reliance on Visa/Mastercard processing as an operational-resilience risk. Standing sub-brief · as of 4 July 2026 98 words · last cycle 2026-07-04 #### Merchant Acquiring & Risk Merchant acquiring in Iceland is concentrated among four principal competing players, Rapyd, Teya, Straumur (the Kvika banki subsidiary) and Landsbankinn, per the Icelandic Competition Authority's 2025 merger-clearance file. Day-to-day acquiring risk management operates within PCI DSS and Visa/Mastercard scheme dispute and chargeback rules rather than a bespoke domestic acquiring statute, consistent with the module's general reliance on scheme-level rather than statutory governance. #### Outlook Expect the four-player concentration confirmed by the 2025 Competition Authority clearance to persist as the market structure baseline, with any further consolidation subject to the same competition-clearance scrutiny applied in 2025. Read full sub-brief · 98 words no periodic updates on record for this sub-brief Evidence 4 Sources and findings (4) - T1[https://en.samkeppni.is/media/akvardanir-2025/Akvordun-9-2025.pdf](https://en.samkeppni.is/media/akvardanir-2025/Akvordun-9-2025.pdf)retrieved 2026-07-04 - T1[https://www.elibrary.imf.org/view/journals/002/2023/280/article-A001-en.xml](https://www.elibrary.imf.org/view/journals/002/2023/280/article-A001-en.xml) Applies beyond this jurisdiction (IMF)retrieved 2026-07-04 - T3[https://ifbusiness.uk/icelands-fintech-revolution/](https://ifbusiness.uk/icelands-fintech-revolution/)retrieved 2026-07-04 - T3[https://www.pxp.io/payments-glossary/card-scheme-rules](https://www.pxp.io/payments-glossary/card-scheme-rules)retrieved 2026-07-04 ### W9Product Innovation & Market DevelopmentConfirmedconfirmed 2026-07-04▾# The dominant current product-innovation story is Iceland's 2026 TIPS/Eurosystem accession, layered on an existing PSD2 open-banking build-out (sandboxes, API partnerships) and a CBI-led push to explore an independent domestic retail payment rail as a resilience hedge against card-network dependency. Standing sub-brief · as of 4 July 2026 151 words · last cycle 2026-09-05 #### Product Innovation & Market Development The dominant product-innovation story for Iceland is the TIPS/Eurosystem accession agreement signed with the ECB on 24 June 2026, which will let Icelandic payment service providers offer real-time ISK/EUR settlement over central-bank-money rails once operational in 2028 — a major forward capability, not yet live. Alongside that, the Central Bank of Iceland and the National Security Council, coordinated through the Forum for the Future group, are expediting work on an independent domestic retail payment system as a resilience hedge against Iceland's dependency on Visa and Mastercard card-network processing. Both strands sit on top of an existing PSD2 open-banking build-out among Icelandic banks and fintechs. #### Outlook The 2028 TIPS go-live and the domestic-rail exploratory work are the two innovation items to track most closely; both are direct responses to the card-network concentration risk identified at W3, and progress on either would materially reshape Iceland's payments product landscape. Read full sub-brief · 151 words Periodic update · new data 2026-08-25 #### Product Innovation & Market Development Iceland's open-banking product landscape produced a genuine but narrow signal this cycle. Landsbankinn launched PSD2-based open-banking account-information (AIS) and payment-initiation (PIS) services in partnership with fintech Meniga, a concrete product-level development, though the sourcing behind it is a single lower-tier vendor account rather than a primary regulatory or bank disclosure, which limits the confidence that can be placed on the claim's specifics. Set against that single product launch, a comparative European open-banking maturity tracker ranked Iceland 18th of 18 countries assessed, explicitly citing low regulatory priority and the absence of implementation guidance from the Central Bank of Iceland as contributing factors. Iceland has transposed PSD2 via Act No. 114/2021 and its Central Bank licenses and supervises electronic-money and payment institutions, so the legal foundation for open banking exists; what the comparative ranking indicates is that transposition alone has not translated into a mature open-banking market, and that Landsbankinn's launch stands out as an individual bank-led initiative rather than evidence of a market-wide shift. This combination, a live product launch alongside a bottom-of-league maturity ranking, is itself the analytically interesting finding. It suggests Icelandic open banking is currently being driven by individual commercial initiative rather than by regulatory push, a pattern distinct from markets where implementation guidance from the supervisor has catalysed broader multi-bank participation. Whether other Icelandic banks follow Landsbankinn's lead, and whether the Central Bank of Iceland moves to issue the implementation guidance the maturity tracker found absent, are both open questions this cycle's sourcing does not resolve. #### Outlook The near-term trajectory for product innovation in Iceland's payments market depends heavily on whether Landsbankinn's open-banking launch proves to be a first mover or an outlier. Absent Central Bank implementation guidance, other Icelandic banks may have limited incentive to match the investment, in which case Iceland's comparative open-banking ranking is likely to persist rather than improve. Any shift in the Central Bank's regulatory priority on open banking would be the clearest catalyst to watch for, though nothing in this cycle's sourcing indicates such a shift is imminent. This is illustrative orientation on the operating environment, not a prediction of competitive outcomes. Evidence 5 Sources and findings (5) - T1[https://www.ecb.europa.eu/press/pr/date/2026/html/ecb.pr260624_1~ce8e85127f.en.html](https://www.ecb.europa.eu/press/pr/date/2026/html/ecb.pr260624_1~ce8e85127f.en.html) Applies beyond this jurisdiction (EU) - T3[https://enablebanking.com/docs/markets/is/](https://enablebanking.com/docs/markets/is/) - T3[https://ifbusiness.uk/icelands-fintech-revolution/](https://ifbusiness.uk/icelands-fintech-revolution/)retrieved 2026-07-04 - T3[https://thepaypers.com/fintech/news/icelandic-neobank-indo-partners-with-enfuce](https://thepaypers.com/fintech/news/icelandic-neobank-indo-partners-with-enfuce)retrieved 2026-07-04 - T1[https://www.elibrary.imf.org/view/journals/002/2023/280/article-A001-en.xml](https://www.elibrary.imf.org/view/journals/002/2023/280/article-A001-en.xml) Applies beyond this jurisdiction (IMF)retrieved 2026-07-04 ### W10Consumer Protection & APP FraudProbableconfirmed 2026-07-04▾# Consumer protection in Icelandic payments is split between the general Consumer Agency and the FME/CBI's financial-sector-specific oversight, with EEA-wide ECC-Net support for cross-border disputes; no dedicated mandatory APP-fraud reimbursement scheme comparable to the UK's was identified after search of CBI/FME consumer-facing material. Standing sub-brief · as of 4 July 2026 115 words · last cycle 2026-07-04 #### Consumer Protection & APP Fraud No mandatory authorised-push-payment fraud reimbursement rule comparable to the UK's Payment Systems Regulator regime was identified in Central Bank of Iceland, Financial Supervisory Authority, or Consumer Agency material; redress instead relies on general consumer law together with European Consumer Centres Network support for cross-border disputes. This is treated as a genuine, confirmed regulatory gap rather than a research coverage failure, following a direct and specific search of the relevant consumer-protection sources. #### Outlook Absent a dedicated APP-fraud reimbursement scheme, Icelandic consumers facing push-payment fraud will continue to depend on general consumer-protection law and cross-border ECC-Net assistance; watch for any EU-level APP-fraud harmonisation initiative that could eventually extend into the EEA Agreement. Read full sub-brief · 115 words no periodic updates on record for this sub-brief Evidence 4 Sources and findings (4) - T1[https://government.is/topics/consumer-affairs/](https://government.is/topics/consumer-affairs/)retrieved 2026-07-04 - T2[https://www.eccnet.eu/consumer-rights/need-help/assistance-outside-eu-norway-or-iceland](https://www.eccnet.eu/consumer-rights/need-help/assistance-outside-eu-norway-or-iceland)retrieved 2026-07-04 - T1[https://island.is/en/consumer-advice](https://island.is/en/consumer-advice)retrieved 2026-07-04 - T3[https://www.mondaq.com/technology/1674410/fintech-comparative-guide](https://www.mondaq.com/technology/1674410/fintech-comparative-guide)retrieved 2026-07-04 ### W11AML/CFT & Financial CrimeSourced from Sentinel.gi ↗Confirmedconfirmed 2026-07-04▾# Sentinel.gi payments-context position: Iceland's AML/CFT regime rests on Act No. 140/2018 (5AMLD transposition), supervised for financial/payment/e-money institutions by the FSA within the CBI, with an independent FIU, and a recent FATF-recognised compliance upgrade; the FSA's May 2025 fine against Fossa fjárfestingarbanki is the most recent notable payments-context enforcement action. Standing sub-brief · as of 4 July 2026 153 words · last cycle 2026-07-04 #### AML/CFT & Financial Crime This module is sourced from the Sentinel.gi feed and reflects payments-context AML/CFT intelligence rather than original illicit-finance analysis. Iceland's AML/CFT regime rests on Act No. 140/2018, transposing the 5AMLD framework, with the Financial Supervisory Authority within the Central Bank of Iceland supervising financial institutions, payment institutions and e-money institutions for compliance, an independent Financial Intelligence Unit sitting within the District Prosecutor's Office, and Iceland having recently been upgraded on its FATF 14-recommendation compliance assessment. The most recent notable payments-context enforcement action is the Financial Supervisory Authority's May 2025 fine against Fossa fjárfestingarbanki for sanctions-screening and AML lapses. For illicit-finance-specific analysis of this enforcement action and the wider AML/CFT regime, readers should consult the Sentinel.gi feed directly. #### Outlook Further payments-context AML/CFT developments will continue to be tracked via the Sentinel.gi feed; this module will report supervisory and enforcement structure as it bears on payment institutions without conducting independent illicit-finance analysis. Read full sub-brief · 153 words no periodic updates on record for this sub-brief Evidence 6 Sources and findings (6) - T3[https://blogs.duanemorris.com/europeansanctionsenforcement/2025/08/13/iceland-bank-fined-for-sanctions-compliance-failings/](https://blogs.duanemorris.com/europeansanctionsenforcement/2025/08/13/iceland-bank-fined-for-sanctions-compliance-failings/)retrieved 2026-07-04 - T?FIM (sentinel.gi) per-JID baseline profile — Iceland — Iceland is a full FATF member (not MONEYVAL-assessed) with a modern AML Act, a dedicated Sanctions Act No. 64/2019, and a Beneficial Ownership Act No. 82/2019. AML/CFT supervision sits with the Central Bank of Iceland's Financial Supervisory Authority (FSA) and the Directorate of Internal Revenue for DNFBPs. As an EEA/EFTA state (not an EU member), Iceland incorporates EU AML directives into the EEA Agreement with a structural lag rather than being directly bound by EU regulations. - T?FIM (sentinel.gi) gaps_register_cumulative (issue FIM-BASE-GAP-003) — Gap: legal-gap - T?FIM (sentinel.gi) gaps_register_cumulative (issue FIM-BASE-GAP-004) — Gap: enforcement-absence - T1FIM (sentinel.gi) sanctions_change_register (issue FIM-BASE-SANC-003) — Sanctions: OFSI divergence - T1FIM (sentinel.gi) enforcement_action_register (issue FIM-BASE-ENF-003) — Enforcement: Government of Iceland (alignment under Sanctions Act No. 64/2019) / EU Council — 5 persons and 4 entities undermining Ukraine's territorial integrity ### W12Correspondent Banking, Settlement & Access1 gapConfirmedconfirmed 2026-07-04▾# CBI operates Iceland's RTGS/interbank settlement system under an explicit statutory mandate, Nasdaq CSD provides CSDR-licensed securities settlement with ISK legs settling in CBI's RTGS and EUR legs integrated into pan-European T2S, and Iceland's 2026 TIPS accession newly extends Eurosystem central-bank-money settlement access to Icelandic PSPs; non-SEPA cross-border access still relies on SWIFT correspondent banking. Open gap — wpm-int-3 No Iceland-specific correspondent-banking access development located this cycle. no under-indexing note recorded Standing sub-brief · as of 4 July 2026 173 words · last cycle 2026-09-05 #### Correspondent Banking, Settlement & Access The bank-versus-non-bank access asymmetry is the analytical spine of this module: the Central Bank of Iceland operates an explicit statutory mandate for the country's RTGS settlement system, and Nasdaq CSD settles ISK securities legs via that RTGS while EUR legs are integrated into the pan-European T2S platform. Non-EUR cross-border access for Icelandic banks continues to run through traditional SWIFT correspondent banking, with certain foreign transactions still reportable to the Central Bank despite the lifting of currency controls — a channel available to bank correspondents in a way that is not directly replicated for non-bank payment institutions. The 24 June 2026 ECB-Seðlabanki Íslands TIPS agreement will, once operational in 2028, newly extend Eurosystem TARGET Services central-bank-money settlement access to Icelandic payment service providers, correcting an earlier overstated framing of this as a completed 2026 accession. #### Outlook The 2028 extension of Eurosystem central-bank-money settlement access is the key structural development to track for this module; until then, the existing RTGS/Nasdaq CSD/SWIFT settlement architecture, with its embedded bank-access advantage, remains unchanged. Read full sub-brief · 173 words Periodic update · new data 2026-08-25 #### Correspondent Banking, Settlement & Access Iceland's correspondent-banking and settlement-access profile is set to shift materially as a downstream consequence of the same TIPS accession agreement between the European Central Bank and the Central Bank of Iceland. Once the Icelandic krona becomes the fifth currency settleable through TARGET Services in 2028, Icelandic banks gain a direct route into the ECB's instant-settlement infrastructure rather than depending solely on correspondent banking relationships for euro-denominated cross-border settlement. This is a structural access development, not an incident-driven one: it changes the settlement rail available to Icelandic banks rather than responding to any specific correspondent-banking disruption or de-risking event. The bank/non-bank distinction is analytically central to this module. The claims reached this cycle describe TIPS access and its underlying legal basis, Rules No. 1030/2020 on the Central Bank of Iceland Interbank Payment System and Act No. 92/2019, in terms of the Central Bank of Iceland's role as system operator and Reiknistofa Bankanna's role as technical service provider, both bank-centric functions. Nothing in this cycle's sourcing extends TIPS-based settlement access to non-bank payment institutions or electronic-money institutions licensed under Iceland's PSD2 transposition (Act No. 114/2021). Whether non-bank PSPs gain equivalent or indirect access to the upgraded settlement rail, whether through participating banks or a future direct-access framework, is an open structural question that this cycle's evidence does not resolve, and should not be assumed to track automatically with the bank-channel accession. Read architecturally, Iceland's settlement-access story this cycle is one of eurozone-adjacent integration proceeding on a bank-led basis, consistent with TARGET Services' historical design as central-bank and commercial-bank infrastructure. This is a meaningfully different access profile from a scenario in which non-bank payment institutions gain parity, and the distinction matters for any assessment of correspondent-banking dependency reduction across the full Icelandic payments ecosystem rather than the bank segment alone. #### Outlook The multi-year runway to 2028 gives Icelandic banks time to plan the transition from correspondent-dependent euro settlement toward direct TARGET Services access, but it also leaves open, for that same period, the question of whether non-bank payment and e-money institutions will see any parallel improvement in settlement access or whether they will continue to rely on correspondent or indirect-access arrangements through participating banks. No sourcing reached this cycle addresses non-bank access plans specifically. This is illustrative orientation on the operating environment, not a projection of how access arrangements will ultimately be structured. Evidence 5 Sources and findings (5) - T1[https://fastpayments.worldbank.org/sites/default/files/2023-08/World%20Bank%20FPS_Iceland_EXP_Case%20Study%20(1).pdf](https://fastpayments.worldbank.org/sites/default/files/2023-08/World%20Bank%20FPS_Iceland_EXP_Case%20Study%20(1).pdf) Applies beyond this jurisdiction (World Bank)retrieved 2026-07-04 - T2[https://en.wikipedia.org/wiki/Nasdaq_CSD](https://en.wikipedia.org/wiki/Nasdaq_CSD)retrieved 2026-07-04 - T2[https://nasdaqcsd.com/iceland/en/settlement-services/](https://nasdaqcsd.com/iceland/en/settlement-services/)retrieved 2026-07-04 - T1[https://www.ecb.europa.eu/press/pr/date/2026/html/ecb.pr260624_1~ce8e85127f.en.html](https://www.ecb.europa.eu/press/pr/date/2026/html/ecb.pr260624_1~ce8e85127f.en.html) Applies beyond this jurisdiction (EU) - T2[https://www.landsbankinn.is/en/international-payments](https://www.landsbankinn.is/en/international-payments)retrieved 2026-07-04 ### W13Commercial Intelligence (M&A, Investment & Product)Confirmedconfirmed 2026-07-04▾# Within the trailing 12-month baseline window (2025-07-04 to 2026-07-04), the standout commercial/infrastructure event is Iceland's formal accession to the ECB's TIPS instant-payments system; no other material M&A or funding events specific to Icelandic payments were confirmed within the window after search. Standing sub-brief · as of 4 July 2026 162 words · last cycle 2026-07-04 #### Commercial Intelligence (M&A, Investment & Product) The standout commercial/infrastructure event in the trailing 12-month baseline window is the TIPS accession agreement between Seðlabanki Íslands and the European Central Bank, announced 24 June 2026, categorised here as a product/rail-access release rather than an M&A transaction: the parties are Seðlabanki Íslands and the European Central Bank, the event is a rail-category product release with launch jurisdiction Iceland, and financial terms are not applicable since this is an infrastructure-access agreement rather than a disclosed-value deal. No other material Icelandic payments M&A or funding event was confirmed within the trailing 12-month window; the nearest comparable events — the Rapyd/Síminn Pay competition clearance and the Borgun/Teya Supreme Court ruling — fall just outside the window and are treated instead under W7 and W8. #### Outlook The TIPS agreement's 2028 operational milestone remains the commercial event to track most closely for Iceland; absent a new disclosed transaction, no further W13-specific commercial events are expected before the next monitoring cycle. Read full sub-brief · 162 words no periodic updates on record for this sub-brief Evidence 1 Sources and findings (1) - T1[https://www.ecb.europa.eu/press/pr/date/2026/html/ecb.pr260624_1~ce8e85127f.en.html](https://www.ecb.europa.eu/press/pr/date/2026/html/ecb.pr260624_1~ce8e85127f.en.html) Applies beyond this jurisdiction (EU) No modules match. Filters combine as OR inside a group and AND across groups. 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