Which one among the following statements about Project Nexus is correct?
- (a)It is an international agreement to enable labour movement between countries.
- (b)It is an international initiative to enable instant cross-border retail payments.
- (c)It is an international initiative to transfer technology between countries.
- (d)It is an international agreement to create database on financial inclusion.
Correct — B, It is an international initiative to enable instant cross-border retail payments. Project Nexus was begun in 2022 by the Innovation Hub of the Bank for International Settlements, working with central banks, to solve a specific plumbing problem. Dozens of countries now run fast domestic payment systems — India's UPI, Singapore's PayNow, Thailand's PromptPay, Malaysia's DuitNow — but joining them up pair by pair means every new country needs a fresh bilateral link, and the number of links grows far faster than the number of countries. Nexus replaces that with a single standardised connection: an operator plugs into Nexus once and reaches every other member, so a person can send money abroad and have it arrive in about sixty seconds. A working prototype demonstrated in March 2023 linked the Eurosystem's system with those of Malaysia and Singapore, and on 1 July 2024 the BIS delivered the completed scheme rulebook, governance framework, commercial model and technology blueprint. In 2025 the initiative moved out of the BIS into a company of its own, Nexus Global Payments, set up by the central banks of India, Indonesia, Malaysia, the Philippines, Singapore and Thailand. Note what the word 'retail' is doing in the correct option: Nexus is aimed at small everyday transfers by individuals and small businesses, not at large-value interbank settlement.
- (a)It is an international agreement to enable labour movement between countries. — Cross-border labour mobility is handled by bilateral migration and mobility partnership agreements, not by a BIS payments project. Nothing in Nexus concerns the movement of people.
- (c)It is an international initiative to transfer technology between countries. — Nexus does publish a common technical blueprint, but its purpose is to make one payment network reach another, not to move technology from one country to another. Technology transfer belongs to trade and climate negotiations.
- (d)It is an international agreement to create database on financial inclusion. — Financial inclusion databases are the World Bank's Global Findex and, in India, the RBI's Financial Inclusion Index. Nexus builds a payment rail; it is not a statistical exercise.
A cross-border retail payment has traditionally travelled through a chain of correspondent banks, each adding a fee, a delay and a point at which the money can be held up, so a small remittance can take days and lose several per cent in charges. Project Nexus attacks that by standardising how one country's instant payment system talks to another's. Instead of each pair of countries negotiating a bespoke link, every system makes one connection to Nexus and thereby reaches all the others. The Bank for International Settlements, the Basel-based body owned by central banks and often called the central bankers' bank, ran the work through its Innovation Hub before handing it to a dedicated company.
The four options are written to be indistinguishable if you have only heard the name, which is the point of the question: 'Nexus' is a deliberately neutral word, so the item is a straight test of whether you have read what the project actually does. Two anchors make it recoverable. First, the initiative belongs to the Bank for International Settlements, whose remit is money and payments and nothing else, which rules out labour mobility and technology transfer at once. Second, India's stake in it is UPI, and UPI is a retail rail — small, instant, everyday transfers — so option (b) is the only one that fits the Indian connection candidates are likely to have met. As of the April 2025 exam Nexus had a blueprint and a founding group of six central banks but was not yet carrying live public traffic; it had moved from the BIS to Nexus Global Payments, which is building it towards launch, so treat any claim that it is fully operational with care.
- Project Nexus was started in 2022 by the BIS Innovation Hub's Singapore Centre to interlink domestic instant payment systems for cross-border retail payments.
- Its design goal is a payment that reaches the recipient in about sixty seconds in most cases, with clearer cost and status than the correspondent banking chain offers.
- A March 2023 prototype connected the Eurosystem's instant payment system with those of Malaysia and Singapore.
- The full Nexus scheme, governance framework, commercial model and technology blueprint were delivered on 1 July 2024.
- In 2025 Nexus Global Payments was incorporated by the central banks of India, Indonesia, Malaysia, the Philippines, Singapore and Thailand, taking the project over from the BIS.
- The model is one connection per system rather than one connection per pair of countries, which is what stops the number of links exploding as members are added.
A BIS payments project. The word 'retail' in the correct option is the giveaway.
- Assuming any project with a technical-sounding name is about technology transfer; check which institution launched it before reading the options.
- Confusing Nexus with a bilateral link such as UPI-PayNow. Nexus is deliberately multilateral — one connection reaching all members.
- Treating Nexus as a wholesale or large-value settlement scheme. It is aimed at retail payments by individuals and small businesses.
As a one-line identification of what the project does, or paired with UPI's overseas linkages in a statements item on India's cross-border payments push.
Consider the following countries : I. United Arab Emirates II. France III. Germany IV. Singapore V. Bangladesh How many countries amongst the above are there other than India where international merchant payments are accepted under UPI?
- (a) Only two
- (b) Only three
- (c) Only four
- (d) All the five
Answer(b) Only three
The Indian end of the same story. That item tests where UPI is already accepted abroad through country-by-country arrangements; Nexus is the attempt to replace those one-at-a-time links with a single multilateral rail.
Which of the following is a most likely consequence of implementing the ‘Unified Payments Interface (UPI)’?
- (a) Mobile wallets will not be necessary for online payments.
- (b) Digital currency will totally replace the physical currency in about two decades.
- (c) FDI inflows will drastically increase.
- (d) Direct transfer of subsidies to poor people will become very effective.
Answer(a) Mobile wallets will not be necessary for online payments.
The domestic instant payment system that India brings to Nexus. Understanding that UPI moves money directly between bank accounts in real time is what makes the phrase 'instant cross-border retail payments' recognisable.
- practice — not a real PYQ
Project Nexus, in the news in the context of cross-border payments, is an initiative of which one of the following?
- (a)The World Trade Organization
- (b)The Bank for International Settlements
- (c)The International Monetary Fund
- (d)The Asian Development Bank
Answer(b) The Bank for International Settlements — its Innovation Hub began Nexus in 2022, and in 2025 handed it to Nexus Global Payments, a company set up by six central banks including the Reserve Bank of India.
- practice — not a real PYQ
The central design idea of Project Nexus is best described as which one of the following?
- (a)A single global currency for retail transactions
- (b)One standard connection per payment system, reaching all other members
- (c)A separate bilateral link negotiated between every pair of countries
- (d)A common central bank digital currency issued by member states
Answer(b) One standard connection per payment system, reaching all other members — that is what stops the number of links growing faster than the number of countries.