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What is Project Nexus?

Reserve Bank of India (RBI) has joined Project Nexus.

What is Project Nexus?

Project Nexus, conceptualised by the Innovation Hub of the Bank for International Settlements (BIS), is a multilateral international initiative to enable instant cross-border retail payments by interlinking domestic Fast Payment Systems (FPSs) / Instant Payment Systems (IPSs). 

Who are part of Project Nexus?

Project Nexus aims to connect the FPSs / IPSs of 4 ASEAN countries (Malaysia, Philippines, Singapore, and Thailand); and India, who would be the founding members and first mover countries of this platform.

An agreement to this effect was signed by the BIS and the central banks of the founding countries i.e., Bank Negara Malaysia (BNM), Bank of Thailand (BOT), Bangko Sentral ng Pilipinas (BSP), Monetary Authority of Singapore (MAS), and Reserve Bank of India (RBI) on June 30, 2024, in Basel, Switzerland. 

Indonesia, which has been involved from the early stages, continues to be involved as a special observer. 

The platform can be extended to more countries, going forward. 

Why has RBI joined Project Nexus?

RBI has been collaborating bilaterally with various countries to link India’s Fast Payments System (FPS) – the Unified Payments Interface (UPI), with their respective FPSs / IPSs for cross-border Person to Person (P2P) and Person to Merchant (P2M) payments. While India and its partner countries can continue to benefit through such bilateral connectivity of FPSs / IPSs, a multilateral approach will provide further impetus to RBI’s efforts in expanding the international reach of Indian payment systems.

What are the benefits of Nexus?

Nexus is designed to standardise the way domestic FPS / IPS connect to one another. Rather than an FPS / IPS operator building custom connections for every new country to which it connects, the operator only needs to make one connection to Nexus. This single connection would allow the FPS / IPS to reach all other countries in the network. 

Once functional, Nexus will play an important role in making retail cross-border payments efficient, faster, and more cost effective.

When will Nexus go live?

The platform is expected to go live by 2026. 

Who will manage Nexus?

A new entity, Nexus Scheme Organisation (NSO), will be responsible for managing the Nexus scheme. The NSO will be wholly owned by the central banks and / or FPS / IPS in participating countries, depending on the specific domestic structures.

What will be the role of BIS?

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.  It will also facilitate cooperation among members and the entry of new participants.


References

Bank for International Settlements. (2024, July 01). 'Project Nexus completes comprehensive blueprint for connecting domestic instant payment systems globally and prepares for work towards live implementation'. Retrieved from https://www.bis.org/press/p240701.htm

Bank for International Settlements. (2024, July 01). 'Project Nexus: Governors see potential to enable instant cross-border payments (video)'. Retrieved from https://www.youtube.com/watch?v=9QJBePGwRdg

Reserve Bank of India. (2024, July 01). 'Reserve Bank of India and ASEAN Countries to Create a Platform to Facilitate Instantaneous Cross-Border Retail Payments'. Retrieved from https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=58197


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