Nexus set to revolutionize Asean cross-border payments

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Nexus set to revolutionize Asean cross-border payments

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Mamerto Tangonan, the deputy governor and head of the payments and currency management sector at the Bangko Sentral ng Pilipinas, tells Euromoney how southeast Asian countries are using advances in digital payments to revolutionize cross-border transactions.

In the realm of cross-border payments, distributed-ledger technology (DLT) has long been seen as a game changer, poised to transform the industry and supplant the dominant Swift-based correspondent banking system. Yet, despite the initial hype, DLT has faced obstacles in terms of scalability and the tedious process of forging bilateral connections between all involved parties.

Mamerto Tangonan, deputy governor and head of the payments and currency management sector at the Bangko Sentral ng Pilipinas (BSP), believes that southeast Asia's Nexus project could offer a viable alternative for faster, cheaper and more transparent cross-border payments.

"The innovation here lies more in the arrangement than the technology," Tangonan tells Euromoney, “as it utilizes existing global standards like ISO 20022 for messaging and APIs for system communication. The real innovation is in the arrangement itself.”

The innovation lies more in the arrangement than the technology
Mamerto Tangonan, Bangko Sentral ng Pilipinas

Although the Philippines was not an initial member of the project's first phase, the country is optimistic after participating in follow-on development. In March 2023, the Bank for International Settlements (BIS) announced the successful connection of test versions of three instant payment systems using the Nexus model, linking the eurozone's Target Instant Payment Settlement, Malaysia's Real-time Retail Payments Platform, and Singapore's Fast and Secure Transfers.

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Senior reporter for Asia
Larissa Ku is a senior reporter for Asia. She joined Euromoney in 2023. Based in Hong Kong, she has spent more than a decade covering private equity, banking, treasury and fintech across various brands, including Asian Venture Capital Journal – where she won State Street Institutional Press Awards Asia Pacific 2023’s technology journalist of the year – Corporate Treasurer and DigFin.
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