Annex: Using an intermediary currency
In many cross-border payments between smaller currencies, the Source Currency is first converted into a third currency – often the US dollar – which is then converted into the Destination Currency.
Nexus does not currently provide this “third currency” mechanism; the FX Provider must swap the Source Currency directly for the Destination Currency. This may mean that certain, less common currency pairs suffer from having only one FX Provider (or even none).
Providing a third-currency route for Nexus payments is possible and would be necessary as the network scales, in order to connect a larger number of countries. However, it does add significant complexity. It would require payments to be made in three IPSs, may require more than one FX Provider and may extend payment times.
This will be addressed in a future phase of work.