BAFT Certificate in Principles of Payments (CertPAY) Practice Test 2025 - Free CertPAY Practice Questions and Study Guide

TARGET2 is the correct choice because it is the real-time gross settlement (RTGS) system specifically designed for processing eurozone payments. Operated by the European Central Bank and the central banks of the eurozone countries, TARGET2 facilitates the instantaneous transfer of funds between banks in different European countries, ensuring that payments in euros are settled efficiently and securely.

This system plays a crucial role in the implementation of the euro and is essential for maintaining financial stability in the eurozone. It supports both interbank payments and transactions related to monetary policy operations, which are vital for the functioning of the European monetary system.

Other systems mentioned, while important in their respective regions, are not specifically tailored for eurozone payments. For example, CHATS is utilized in Hong Kong, CNAPS is the Chinese payment system for yuan transactions, and RITS operates in Australia. Each of these systems serves different currencies and purposes, distinguishing them from TARGET2, which is uniquely focused on euro transactions.