July 1st 2024.
In an exciting development, the Reserve Bank of India has announced its participation in Project Nexus alongside four ASEAN countries. This project, initiated by the Innovation Hub of the Bank for International Settlements, aims to establish a platform for instant cross-border retail payments.
The RBI revealed that the platform will connect India's UPI system with the fast payment systems of Malaysia, Philippines, Singapore, and Thailand. These four countries, along with India, will be the founding members of this platform. The agreement for this collaboration was recently signed in Basel, Switzerland, by the BIS and the central banks of the founding countries - Bank Negara Malaysia, Bank of Thailand, Bangko Sentral ng Pilipinas, Monetary Authority of Singapore, and Reserve Bank of India.
While Indonesia has been involved in the project since its early stages, they will continue to participate as a special observer. The RBI has been working with various countries on a bilateral level to link India's Fast Payments System, the Unified Payments Interface, with their respective systems for cross-border Person to Person and Person to Merchant payments.
The RBI believes that while bilateral connections have been beneficial, a multilateral approach will further enhance the international reach of India's payment systems. They also stated that the platform has the potential to expand to more countries in the future. The platform is expected to be fully functional by 2026 and will play a crucial role in improving the efficiency, speed, and cost-effectiveness of retail cross-border payments, according to the RBI statement.
This development marks a significant step towards strengthening the ties between India and its ASEAN neighbors and will have a positive impact on the global economy. The RBI's participation in Project Nexus is a testament to their commitment to innovation and progress in the field of cross-border payments. The future looks promising, and we can't wait to see the positive impact of this collaboration.
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