Project Nexus, the Bank for International Settlements-led initiative to enhance cross-border payments among participating countries, is a step closer to full implementation, with the completion of the “comprehensive blueprint” to be used for live implementation.

The next phase of development, the implementation and roll-out phase, will involve central banks and instant payment service (IPS) operators from India, Malaysia, the Philippines, Singapore and Thailand. Indonesia is also involved in the project as a special observer.

“With just the first wave of connected countries, Nexus has the potential to connect a market of 1.7 billion people globally,” says Agustín Carstens, BIS general manager, “allowing them to make instant payments to each other easily and cheaply.”

During the implementation and roll-out phase, which is the fourth phase of the project, the Bank Negara Malaysia, Bangko Sentral ng Pilipinas, the Monetary Authority of Singapore, the Bank of Thailand and the Reserve Bank of India, as well as select domestic IPS operators of the five countries, will work to establish a new entity called the Nexus Scheme Organization (NSO).

The NSO will be wholly owned by the central banks and IPS operators involved in the project and dependent on their specific domestic structures, while the BIS Innovation Hub will serve in a technical advisory role through its centre in Singapore. Once up and running, the NSO will be responsible for the management of Nexus. 

“When implemented,” Carstens says of the project, “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.”

When fully operational, the BIS and the involved central banks say that Nexus will standardize the way domestic IPSs connect to one another. 

While in the past, an IPS operator had to build and negotiate a custom connection for every new country to which it connects, with Project Nexus, the operator only needs to make one connection to Nexus, which in turn will allow the IPS to reach all other countries in the network.