Context:
Reserve Bank of India (RBI) joins Project Nexus to enable instant cross-border retail payments.
Project Nexus:
- Nexus – A multilateral international initiative to enable instant cross-border retail payments by interlinking domestic Instant Payments Systems (IPS).
- What is IPS? – An electronic payments system which facilitates inter-bank fund transfer and sends confirmation of payment to the receiver and originator within a minute or less. E.g. Unified Payments Interface (UPI).
- Conceptualized by the Innovation Hub of the Bank for International Settlements (BIS).
- Connects IPS of 4 ASEAN countries (Malaysia, Philippines, Singapore, and Thailand). [India is expected to go live by 2026]
- Features –
- Designed to standardise the way domestic IPS connects to one another.
- Rather than an IPS operator building custom connections for every new country to which it connects, the operator only needs to make one connection to Nexus.
- Aims to achieve G20 targets of enabling cheaper, faster, more transparent and accessible cross-border payments.
Bank for International Settlements (BIS):
- Established in 1930
- Headquarters – Basel, Switzerland
- Owned by – 63 central banks (including RBI)
- Genesis – Created out of The Hague Agreements of 1930
- Aim – To foster international monetary and financial cooperation while serving as a bank for central banks.
- Importance –
- Represents countries from around the world that together account for about 95% of world GDP.
- Provides a platform for responsible innovation and knowledge-sharing in-depth analysis and insights on core policy issues sound and competitive financial services.
Source: The Hindu
Previous Year Question
With reference to Central Bank digital currencies, consider the following statements:
1. It is possible to make payments in a digital currency without using US dollar or SWIFT system.
2. A digital currency can be distributed with condition programmed into it such as a time-frame for spending it.
Which of the statements given above is/are correct?
[UPSC Civil Services Exam – 2023 Prelims]
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Answer: (c)
