In a monumental step towards transforming global financial transactions, the Bangko Sentral ng Pilipinas (BSP), Bank for International Settlements (BIS), and their partners have recently announced the successful completion of the comprehensive blueprint for Phase Three of Project Nexus.
Project Nexus is an ambitious initiative that aims to seamlessly connect instant payment systems (IPS) across multiple countries, ushering in a new era of cross-border financial connectivity. On March 2023, the Bank for International Settlements (BIS) Innovation Hub Singapore – Center has successfully connected test versions of three established Instant Payment Systems (IPS) using the Nexus model.
Photo shows (from left) Governor Sethaput Suthiwartnarueput of Bank of Thailand, Governor Eli M. Remolona Jr. of Bangko Sentral ng Pilipinas, Governor Shri Shaktikanta Das of Reserve Bank of India, General Manager Agustín Carstens of Bank for International Settlements, Governor Datuk Abdul Rasheed Ghaffour of Bank Negara Malaysia, and Managing Director Chia Der Jiun of Monetary Authority of Singapore during the launch of Project Nexus Phase 4 in Basel, Switzerland last June 30, 2024.
Project Nexus: To Expand Horizons in Phase Four
The upcoming Phase Four of Project Nexus will see an impressive expansion, with the Central Bank of Malaysia, BSP, the Monetary Authority of Singapore, and the Bank of Thailand, who were instrumental in Phase Three, being joined by the Reserve Bank of India.
This inclusion will extend Project Nexus to India’s Unified Payments Interface (UPI), the world’s largest IPS, significantly broadening the project’s reach.
Bank Indonesia (BI) will maintain its involvement with Nexus as a special observer, continuing its participation from Phase Three to closely monitor and contribute to the project’s progress.
Revolutionizing IPS Connectivity
Project Nexus is engineered to revolutionize the way domestic IPS connect globally. Instead of each IPS operator building custom connections for every new country, they will now need only one connection to Nexus. This single link will enable them to reach all other countries within the network, simplifying and streamlining cross-border payments.
Transformative Impact on Global Payments
In a press release, BIS General Manager Agustin Carstens highlighted the transformative potential of Nexus, saying, “As we advance from concept to reality, Project Nexus is poised to revolutionize cross-border payments. This pioneering BIS Innovation Hub project, in collaboration with central banks and instant payment providers, aligns with the G20 cross-border payments programme. With the initial wave of connected countries, Nexus can potentially serve 1.7 billion people globally, making instant payments seamless and affordable.”
Empowering Filipinos and ASEAN Collaboration
BSP Governor Eli M. Remolona, Jr. echoed the sentiment: “Driven by a vision of efficient and reliable cross-border payments, the BIS-ASEAN collaboration has been highly effective. Nexus will extend central banks’ role in payments to the cross-border realm, maximizing network effects. The BSP is committed to working with the Philippine payments industry, BIS, and other nations to implement Nexus. This initiative promises to provide overseas Filipinos with cheaper, faster remittance options and bolster the global presence of Filipino SMEs.”
Next Steps and Future Vision
The findings and lessons from Phase Three of Nexus are detailed in a report published today. This includes a comprehensive scheme rulebook, technical implementation guides, and ISO 20022 message specifications, available to central banks upon request.
To facilitate the live implementation of Nexus, partner central banks and IPS operators are working towards establishing the Nexus Scheme Organisation (NSO). This new entity will manage the Nexus scheme, driving the mission of achieving large-scale instant cross-border payments.
While the BIS will not own or operate the NSO, it will provide ongoing technical advisory support, foster cooperation among members, and assist in onboarding new participants, ensuring Nexus’s global ambitions are realized.
As Project Nexus advances, the world edges closer to a future where instant, seamless, and affordable cross-border payments become a reality, revolutionizing global financial interactions and empowering economies worldwide.