The Bank for International Settlements (BIS) and partners have completed the comprehensive blueprint for phase three of Project Nexus, allowing ready participants to work towards the next stage of connecting their instant payment systems (IPS).
Project Nexus is a BIS Innovation Hub project that seeks to enhance cross-border payments by connecting multiple domestic IPS globally. Designed to standardise the way domestic IPS connect to one another, the project enables operators to make just one connection to Nexus for the IPS to reach other countries in the network, rather than an IPS operator building custom connections for every new country to which it connects. The project is the first BIS Innovation Hub project in the payments area to move towards live implementation.
Phase four of the project will see Bank Negara Malaysia (BNM), Bangko Sentral ng Pilipinas (BSP), the Monetary Authority of Singapore (MAS), the Bank of Thailand and domestic IPS operators joined by the Reserve Bank of India, expanding the project’s potential user base to India’s Unified Payments Interface (UPI), the world’s largest IPS.
The Bank Indonesia (BI) meanwhile, will continue its association with the project with a special observer status.
“I wish our partners in Nexus every success as they advance the project from concept to reality. This is the first BIS Innovation Hub project that central banks are moving towards a live phase together with instant payment providers. When implemented, it will greatly enhance cross-border payments in line with both the G20 cross-border payments programme and our mission to develop public goods in the technology space to support central banks and improve the functioning of the financial system,” says Agustín Carstens, General Manager of BIS.
Chia Der Jiun, Managing Director of MAS, adds: “Nexus can reshape cross-border payments. Accessible, secure and convenient cross-border instant payments will drive financial inclusion and spur economic integration between countries.”
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Representatives of the other banking institutions involved in Project Nexus are similarly pleased with its progress.
“We look forward to Nexus providing overseas Filipinos with a cheaper and faster means to send money to family back home, and facilitating the globalisation of Filipino small and medium scale enterprises,” says Eli M. Remolona Jr, BSP Governor.
Abdul Rasheed Ghaffour, BNM Governor says: “The comprehensive blueprint for taking Project Nexus forward is a product of the strong cooperation of participating Asean central banks working closely with the BIS to deliver a world-leading cross-border payment infrastructure that will not only benefit our nations but also pave the way for greater global payment connectivity.”
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“While Nexus has started in Asean, it has a global ambition—as it will be able to link up very easily and speedily with other economies,” says Sethaput Suthiwartnarueput, Bank of Thailand Governor, while Shaktikanta Das, Reserve Bank of India Governor, adds: “This Is a precursor to greater international cooperation among countries to enable faster cross-border remittances at a lower cost.”
To facilitate live implementation, the partner central banks and IPS operators have agreed to work towards establishing a new entity, the Nexus Scheme Organisation (NSO), which will be responsible for managing the Nexus scheme. The NSO will be wholly-owned by the central banks and IPS in participating countries, depending on the specific domestic structures.
In developing the blueprint in phase three of Nexus, the BIS has supported central banks in finding innovative solutions to deliver public goods, as well as one of its key commitments to the G20 Roadmap for Enhancing Cross-border Payments.
While the BIS will not own or operate the NSO, it will continue its support by playing a technical advisory role as participating countries work towards taking Nexus live, while also facilitating cooperation among members and the entry of new participants.
