Project Mandala, a collaborative effort between the Bank for International Settlements (BIS) and central banks, aims to simplify cross-border financial operations. It explores the possibility of encoding unique policy and regulatory requirements from various jurisdictions into a unified protocol, benefiting areas such as foreign direct investment, borrowing, and payments.
Cross-border payments are often hindered by diverse policy and regulatory frameworks across jurisdictions. These disparities lead to increased regulatory compliance challenges, prolonged transaction times, and heightened uncertainties among stakeholders.
Project Mandala, driven by the BIS Innovation Hub (BISIH) Singapore Centre, in partnership with the Reserve Bank of Australia (RBA), Bank of Korea (BOK), Bank Negara Malaysia (BNM), and the Monetary Authority of Singapore (MAS), as well as financial institutions, seeks to alleviate these compliance challenges. It does so by automating compliance procedures, offering real-time transaction monitoring, and enhancing transparency regarding jurisdiction-specific policies.
This initiative addresses issues highlighted in Project Dunbar, which focused on an experimental multiple central bank digital currency (mCBDC) platform. The compliance-by-design framework envisioned by Project Mandala could facilitate more efficient cross-border transfers of various digital assets, including central bank digital currencies (CBDCs) and tokenized deposits. It could also serve as the foundational compliance layer for both existing and emerging wholesale or retail payment systems.
The measures may encompass quantifiable and adaptable foreign exchange rules, as well as anti-money laundering and countering the financing of terrorism (AML/CFT) measures.
Project Mandala aligns with the Financial Stability Board’s 2023 priorities for achieving G20 targets. These priorities aim to enhance cross-border payments by promoting an efficient legal, regulatory, and supervisory environment while ensuring their safety, security, and integrity.
By FCCT Editorial Team
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