Central Banks Prepare for Cross-Border Payment Breakthrough

The evolution of global, real-time cross-border payments is entering a new phase. Five central banks behind Project Nexus, an initiative by the Bank for International Settlements (BIS), have initiated a formal procurement process to appoint a Nexus Technical Operator (NTO). This development signifies a significant leap from proof-of-concept to full-scale implementation, potentially leading to the creation of the world’s first multilateral infrastructure for instant cross-border payments.

Cross-Border Payment Breakthrough

Project Nexus aims to interconnect domestic instant payment systems (IPS) through a single, centralized platform. It uses ISO 20022 standards and purpose-built APIs to enable seamless, secure, and near-instant international transactions. Unlike fragmented bilateral arrangements, Nexus offers a multilateral approach promising scalability, transparency, and interoperability.

In 2022, an initial proof-of-concept involving the Eurosystem, Singapore, and Malaysia set the stage for further development. The BIS Innovation Hub in Singapore collaborated with central banks and IPS operators in five Southeast Asian countries—Indonesia, Malaysia, the Philippines, Singapore, and Thailand—to refine the model. This groundwork has laid the foundation for a potential live cross-border network enabling real-time fund transfers across diverse jurisdictions.

Stepping Back From Oversight

With the transition to live operations on the horizon, the BIS will step back from daily oversight, transferring this responsibility to Nexus Global Payments (NGP). NGP is a not-for-profit entity incorporated in Singapore, established by the Reserve Bank of India, Bank Negara Malaysia, Bangko Sentral ng Pilipinas, the Monetary Authority of Singapore (MAS), and Bank of Thailand. NGP will oversee the platform’s ongoing development and governance. The European Central Bank and Bank Indonesia will continue as special observers, despite not being part of the operational core.

Nexus Global Payments

NGP’s interim leadership will be headed by MAS executive Benjamin Lee, who will serve as director until a permanent appointee is appointed. Lee’s tenure will coincide with the critical procurement process to identify a suitable technical partner. The selected NTO will be responsible for building, operating, and securing the Nexus infrastructure, meeting stringent standards for performance, resilience, and regulatory compliance.

Crucially, the founding jurisdictions have committed initial capital to fund the platform’s development, with plans to expand Nexus membership to other central banks over time. This reflects a broader ambition to offer a shared digital backbone that reduces cost and complexity in global payments, particularly for remittances and low-value cross-border transfers. At the same time, it aims to preserve national sovereignty and regulatory independence.

Conclusion

As the world looks on, Project Nexus is poised to reshape the architecture of international payments. This initiative represents a bold step forward in creating a more connected, efficient, and secure global payment system. With the appointment of a Nexus Technical Operator, Project Nexus is set to transition from a promising concept to a transformative reality, potentially revolutionizing how cross-border payments are conducted.