KUALA LUMPUR: Bank Negara Malaysia (BNM) is working with ASEAN 5 (Indonesia, Philippines, Singapore, Thailand, and Malaysia) together with the Bank for International Settlements Innovation Hub in Singapore to put in place a multilateral platform for cross-border payment connectivity.
BNM assistant governor Suhaimi Ali said, known as Project Nexus, it aims to make transactions across borders to be efficient, similar to the domestic payment system.
He said the launch of today's bilateral cross-border payment linkages is in the right direction, nevertheless, bilateral connectivity remained a challenge as it is expensive and may not be scalable.
"BNM is trying to resolve this because as an open economy, we have many trade partners wherein there are two-way flows that need to be managed.
"Besides, we will also need to address the issues on Know Your Customers (KYC) to ensure that people who are (making the) transactions are not related to crimes and illegal activities," he said in a panel discussion titled 'Digitalisation in Payments: Going Digital with Confidence in an Innovative Landscape'.
The panel discussion was held in conjunction with BNM's Sasana Symposium 2023 and the launch of Bilateral Cross-Border Payment Linkages at Sasana Kijang here, today.
Suhaimi said the complexity of Project Nexus cannot be undermined and among the factors that need to be considered before implementing the platform in the real-world is the governance arrangement for the entity that would manage and operate the Nexus solutions.
"This would require, among others, the right structure, who is going to be the vendor running it, and what kind of oversight that BNM needs to have and so on.
"At this point, we do not know the final outcome of this as it is an exploration together with ASEAN 5," he added. - Bernama