On 1 July 2024, the Bank for International Settlements (“BIS“) and partners announced the completion of phase 3 of Project Nexus, which will allow ready participants to work towards the next stage of seamlessly connecting their instant payment systems (“IPS“).
How Nexus Works
By way of background, Nexus is a BIS Innovation Hub project that seeks to enhance cross-border payments by standardising the way domestic IPS connect to one another. Instead of building custom connections for every new country to which it connects, an IPS operator need only make one connection to Nexus. This single connection would allow the IPS to reach all other countries in the network.
Central banks, standard-setting bodies, IPS operators and commercial entities around the world have been consulted to validate that Nexus is scalable and interoperable beyond the current participants.
For more information on phase three of Nexus, please refer to the report titled “Project Nexus: Enabling instant cross-border payments“, also published on 1 July 2024. Central banks may also request for a detailed scheme rulebook and technical implementation guides, as well as ISO 20022 message specifications.
Live Implementation
In Phase 4, BIS will facilitate central banks and IPS operators of India, Malaysia, the Philippines, Singapore and Thailand as they work towards live implementation in the next phase, with the Bank of Indonesia as a special observer.
This first wave of connected countries has the potential to connect a global market of 1.7 billion people, driving financial inclusion and spurring economic integration between countries.
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“). NSO will be responsible for managing the Nexus scheme and continuing the mission to achieve instant cross-border payments at scale. It will be wholly owned by the central banks and/or IPS in participating countries. BIS will continue to play a technical advisory role, facilitate the entry of new participants, and foster cooperation among members.
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