The Bank for International Settlements (BIS) and its central bank partners have launched Project Mandala on Oct 5. The project is a joint collaboration between BIS Innovation Hub Singapore Centre, the Monetary Authority of Singapore (MAS), the Reserve Bank of Australia (RBA), Bank of Korea (BOK) and Bank Negara Malaysia (BNM) along with financial institutions.
According to the joint release, Project Mandala will look into the feasibility of encoding jurisdiction-specific policy and regulatory requirements into a common protocol for cross-border use cases such as foreign direct investment, borrowing and payments. This will overcome key obstacles faced by cross-border payments such as having to deal with the different set of policy and regulatory frameworks in different jurisdictions.
The project also seeks to ease the policy and regulatory compliance burden by automating compliance procedures, providing real-time transaction monitoring and increasing transparency and visibility around country-specific policies. The measures could include quantifiable and configurable foreign exchange rules, as well as measures against anti-money laundering and countering the financing of terrorism (AML/CFT).
The envisioned compliance-by-design architecture could enable a more efficient cross-border transfer of any digital assets including CBDCs and tokenised deposits, says BIS and its central bank partners via their Oct 5 release. It could also serve as the foundational compliance layer for legacy and nascent wholesale or retail payment systems, they add.
