THE BANGKO SENTRAL ng Pilipinas (BSP) and the four other central banks in the region that are the “first movers” in an instant cross-border payments initiative have set up an entity to run the scheme, bringing it closer to live implementation.
The BSP, Reserve Bank of India, Bank Negara Malaysia, the Monetary Authority of Singapore (MAS), and Bank of Thailand, the first-mover central bank partners in Project Nexus, have incorporated Nexus Global Payments (NGP) in Singapore to operationalize and manage the multilateral instant cross-border payments scheme.
The company, which is a nonprofit organization, will run the scheme to enable safe and instant cross-border payments at scale, it said in a statement.
“Its incorporation by the five central bank partners in Project Nexus … marks the transition of the Nexus initiative from a Bank for International Settlements’ (BIS) project to real-world implementation,” it said.
In March 2023, the five central banks said they will connect their domestic instant payment systems (IPS) through Project Nexus, which began as an experimental project by the BIS Innovation Hub in 2021.
The project was designed to standardize domestic IPS connection. “Rather than an IPS operator building custom connections for every new country to which it connects, the IPS operator needs to make only one connection to Nexus, which will allow the IPS to reach all other jurisdictions in the network.”
The comprehensive blueprint for connecting domestic IPS globally was completed in July last year.
The five central bank partners will contribute the initial capital required to build and establish the Nexus platform for its live operation, NGP said.
“They aim to expand membership and participation to other interested jurisdictions over time as part of the shared vision of making Nexus a scalable multilateral model for connecting IPS globally,” it said.
NGP has started an open procurement process for the selection of a Nexus Technical Operator, an external service provider that will be responsible for the technical build and the day-to-day operations of the Nexus scheme.
“The European Central Bank and Bank Indonesia, which took part in previous phases of Nexus, will continue to serve as special observers throughout this operationalization phase. The BIS is not an owner of NGP. As part of the handover, it will facilitate knowledge transfer and provide support until the first live Nexus transaction,” it added. — AMCS