Today the Bank for International Settlements (BIS) unveiled Project Nexus, a platform to link domestic faster payment systems for instant cross border payments. Nexus builds on a project between Singapore and Thailand which links the two country’s faster payment systems allowing cross border payments with just a phone number. Apart from instant payments, it enables cheaper and more transparent transfers.
A year ago, the BIS published a paper for the G20 with a roadmap for addressing cross border payment challenges. One focus area was to explore new payment infrastructures and arrangements. That included central bank digital currencies (CBDCs), stablecoins, and new multilateral platforms such as Project Nexus.
The challenge with the Singapore – Thai solution is expanding the concept to many countries, with more than 60 faster payments systems operational around the world. If Singapore and Thailand wanted to connect to all the other countries, each would need to perform 59 integrations. Such bilateral connections are slow and painful to both implement and maintain.
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