KUALA LUMPUR: Central banks from Malaysia, Philippines, Singapore and Thailand have agreed on a comprehensive blueprint to connect instant payment systems between the countries.
In a statement today, Bank Negara Malaysia said project Nexus is a Bank for International Settlements (BIS) Innovation Hub project that seeks to enhance cross-border payments by connecting multiple domestic instant payment systems (IPS) globally.
The blueprint will enable the central banks to move towards live implementation.
The next phase will see Bank Negara Malaysia, Bangko Sentral ng Pilipinas, Monetary Authority of Singapore, Bank of Thailand and domestic IPS operators – who worked together previously – joined by the Reserve Bank of India, expanding the potential user base to India's Unified Payments Interface (UPI), the world's largest IPS.
Bank Indonesia (BI) will continue its association with the project with special observer status.
"The comprehensive blueprint for taking Project Nexus forward is a product of the strong cooperation of participating Asean central banks working closely with the BIS to deliver world-leading cross-border payment infrastructure," Bank Negara Malaysia governor Abdul Rasheed Ghaffour said.
"This will not only benefit our nations but also pave the way for greater global payment connectivity. We welcome India to the next phase of Project Nexus," he said in a statement today.
BIS general manager Agustín Carstens added that the implementation of the IPS will greatly enhance cross-border payments in line with both the G20 cross-border payments programme and their mission to develop public goods in the technology space to support central banks and improve the functioning of the financial system.
"Even with just the first wave of connected countries, Nexus has the potential to connect a market of 1.7 billion people globally, allowing them to make instant payments to each other easily and cheaply," he said.
The partner central banks and IPS operators have agreed to work towards establishing a new entity, the Nexus Scheme Organisation (NSO), to facilitate live implementation which will be responsible for managing the Nexus scheme, and continuing the mission to achieve instant cross-border payments at scale.
The NSO will be wholly owned by the central banks and/or IPS in participating countries, depending on the specific domestic structures.
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, helping to realise Nexus's global ambition.