Project Nexus

25.07.2024

Project Nexus

Why in the news?

RBI recently joined Project Nexus, an initiative to enable instant cross-border retail payments by linking domestic Fast Payment Systems.

About Project Nexus:

• It is a multilateral international initiative to enable instant cross-border retail payments by interlinking domestic Fast Payments Systems (FPSs).
• Rather than requiring FPS operators to establish multiple custom connections for each country, Nexus provides a standardized, single-connection solution that enables seamless transactions across borders.
• With Nexus, an FPS operator can connect to a single network, enabling instant access to other countries within the network.
• It was conceptualized by the Innovation Hub of the Bank for International Settlements (BIS).
• It aims to connect the FPSs of four ASEAN countries (Malaysia, Philippines, Singapore, and Thailand); and India, who would be the founding members and first mover countries of this platform.
• The platform, which can be extended to more countries, is expected to go live by 2026.
• When a new country joins Nexus, existing members are automatically connected to that country and vice versa. This means the network can expand at a near-zero marginal cost for existing members.
• By simplifying and unifying the payment infrastructure, Project Nexus seeks to enhance efficiency, reduce costs and improve the accessibility of international payments.

Key Facts about Bank for International Settlements (BIS):

• It is an international financial institution which is owned by member central banks.
• Founded in 1930, the BIS is the oldest global financial institution and operates under the auspices of international law.
• Its primary goal is to foster international monetary and financial cooperation while serving as a bank for central banks.
• Headquarters: Basel, Switzerland
• The BIS, which is owned by 63 national central banks, also provides independent economic analysis.

                                                               Source: The Times of India

Ques :- Consider the following statements regarding Project Nexus:

Statement-I

 It is a multilateral international initiative to enable instant cross-border retail payments by interlinking domestic Fast Payments Systems (FPSs).

Statement-II

It was conceptualized by the Innovation Hub of the Bank for International Settlements (BIS).

Which one of the following is correct in respect of the above statements?

A.Both Statement-I and Statement-II are correct, and Statement-II is the correct explanation for Statement-I.

B.Both Statement-I and Statement-II are correct, and Statement-II is not the correct explanation for Statement-I.

C.Statement-I is correct, but Statement-II is incorrect.

D.Statement-I is incorrect, but Statement-II is correct.

Answer A