BIS Streamlines Compliance for International Payments

The Bank for International Settlements (BIS) has advanced in automating compliance for international transactions through Project Mandala.

BIS representatives have updated the Project Mandala webpage, which is investigating automated compliance for cross-border transactions. The latest update indicates that the project has entered the proof-of-concept stage.

Project Mandala is a collaborative effort between the BIS and several central banks, forming part of the G20 initiative aimed at enhancing cross-border payments. Participants in Project Mandala include the Monetary Authority of Singapore (MAS), the Reserve Bank of Australia (RBA), the Bank of Korea (BOK), the Central Bank of Malaysia (BNM), the BIS Innovation Hub Centre of Singapore, along with various commercial financial institutions.

Participants in Project Mandala have shown through system testing that regulatory compliance can be integrated into a P2P protocol for handling cross-border transactions. The system automatically sends the required data to produce proof of compliance and manage any additional information necessary for compliance verification. Information transfer is conducted privately using zero-knowledge proof (ZKP) technology, enabling transaction participants to uphold a significant degree of confidentiality.

Project Mandala was included in the Bank for International Settlements’ list of major projects for 2024. Its objectives include focusing on tokenization, central bank digital currencies (CBDC), cybersecurity, and sustainable finance.

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