Question
Download Solution PDFWhich one among the following statements about Project Nexus is correct?
This question was previously asked in
UPSC CDS-I 2025 (General Studies) Official Paper (Held On: 13 Apr, 2025)
Answer (Detailed Solution Below)
Option 2 : It is an international initiative to enable instant cross-border retail payments.
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UPSC CDS 01/2025 General Knowledge Full Mock Test
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Detailed Solution
Download Solution PDFThe correct answer is It is an international initiative to enable instant cross-border retail payments.
Key Points
- Project Nexus is spearheaded by the Bank for International Settlements (BIS) Innovation Hub to enable instant cross-border retail payments.
- It aims to establish interlinkages between national payment systems to facilitate faster and low-cost international transactions.
- The project focuses on creating a unified technical blueprint for connecting domestic payment systems globally.
- Project Nexus leverages existing fast payment systems (FPS) in participating countries to reduce reliance on traditional correspondent banking networks.
- The initiative seeks to enhance financial inclusion by simplifying cross-border payments for individuals and small businesses.
Additional Information
- Fast Payment Systems (FPS):
- FPS are domestic systems that enable real-time transfer of funds between individuals and businesses.
- Examples include India's Unified Payments Interface (UPI) and Brazil's Pix system.
- Project Nexus seeks to connect such systems internationally for seamless cross-border payments.
- Cross-Border Payments:
- These are transactions where the payer and payee are located in different countries.
- Traditional methods often rely on SWIFT and correspondent banking networks, which can be costly and slow.
- Project Nexus addresses these issues by leveraging FPS and reducing intermediaries.
- BIS Innovation Hub:
- The BIS Innovation Hub focuses on fostering international collaboration to explore technological solutions for financial stability.
- It is involved in projects like CBDCs (Central Bank Digital Currencies) and improving payment infrastructures.
- Financial Inclusion:
- Financial inclusion refers to providing affordable and accessible financial services to all individuals, particularly underserved populations.
- By facilitating low-cost cross-border transactions, Project Nexus aims to bridge gaps in access to financial services.
Last updated on Jul 7, 2025
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