Nexus is a model for connecting multiple national payment systems into one cross-border platform that could enable international payments as quickly as sending an SMS.
The Bank for International Settlements (BIS) has teamed up with the Monetary Authority of Singapore, the country’s financial regulator, to publish a draft for multilateral cross-border interconnection of domestic real-time payment systems.
Building on the bilateral link between Singapore’s PayNow and Thailand’s PromptPay introduced in April 2021, the draft also uses the experience of the National Payments Corporation of India (NPCI) in the development and operation of the Unified Payments Interface (UPI) system.
The draft is titled Project Nexus (link to .pdf) and provides for the creation of ‘Nexus Gateways’, which serve to coordinate compliance, currency conversion, message translation and payment sequence between all participants.
An overarching nexus scheme defines the governance framework and the set of rules for the participating retail payment systems, banks and payment service providers in order to coordinate and carry out cross-border payments via the network.
Benoît Cœuré, Head of the BIS Innovation Hub, commented: “The Nexus project seeks to achieve the equivalent of Internet protocols for payment systems. That means creating a model through which any country can join by adopting certain technical and governance requirements. “
Project Nexus requires participating countries to adopt the protocols once in order to gain access to the wider cross-border payment network. Countries are not required to negotiate payment relationships on a bilateral basis with each jurisdiction.
Andrew McCormack, Head of the BIS Innovation Hub Singapore Center, said, “Country-to-country and regional payment links are already in place. However, they require a considerable amount of coordination, which increases exponentially with more participants. Three countries need three bilateral connections, but 20 countries would need 190 bilateral connections. “
The Bank for International Settlements announced that Nexus is a model for connecting several national payment systems into one cross-border platform, which could enable international payments to be made as quickly as sending an SMS.
Ripple’s XRP, what is it now? SWIFT announces cross-border payments in seconds
BIS proposes connecting national systems internationally to improve the speed, costs and transparency of cross-border payments, which is essentially the mission of blockchain firms such as XRP-powered Ripple, Stellar (XLM) by ex-Ripple founder Jed McCaleb and new . in summary brought the Six Clovers operated by Algorand onto the market.
SWIFT has just announced cross-border payments in seconds with its new messaging product SWIFT Go, which complements cross-border settlement services such as BIS ‘Project Nexus and Ripple’s On-Demand Liquidity.
Yesterday, Ripple announced the go-live of its on-demand liquidity in Japan, paving the way for greater acceptance of crypto-enabled services in the Asia-Pacific region.
The news further proves the usefulness of the XRP ledger at a turbulent time for Ripple Labs over the ongoing legal battle with the SEC claiming that XRP is a security for its “decentralized nature”.
SEC Commissioner Hester Peirce recently made it clear that the agency could file complaints against companies about unregistered securities offerings, even if that instrument is not a security in the eyes of the SEC.
The same commissioner, along with SEC Commissioner Elad Roisman, released a public statement – “a godsend” – admitting the lack of clarity in the digital asset space, which further adds to Ripple’s claim that it did not make a fair announcement that XRP could be viewed as a security.
The defense of Ripple’s Fair Notice is believed to pose a threat to the SEC’s future enforcement actions against the crypto ecosystem. The agency itself warned the court that a Ripple win on Fair Notice would nullify the Howie test.
In June, BIS opened an innovation hub in London to advance digital currencies. Later that month, the institution praised CBDCs versus Bitcoin, adding that stablecoins are not a game changer as they have the potential to fragment the liquidity of the monetary system.