As a seasoned researcher with a keen interest in financial technologies and their impact on global economies, I find the progress made by Project Mandala at the Bank for International Settlements (BIS) incredibly exciting. Having witnessed firsthand the challenges that cross-border transactions often pose due to varying regulatory landscapes, it’s refreshing to see a collaborative effort among central banks worldwide to address these issues head-on.
Through Project Mandala, the Bank for International Settlements (BIS) and its collaborating central banks have shown it’s possible to incorporate regulatory compliance within international transaction procedures.
As a collaborative analyst, I’m part of an international effort that brings together central banking institutions from around the globe. This includes the BIS Innovation Hub Singapore Centre, the Reserve Bank of Australia, the Bank of Korea, Bank Negara Malaysia, and the Monetary Authority of Singapore (MAS). Together, we’re working towards a common goal.
On October 28th, the BIS made an update to the Project Mandala webpage, noting that the project has progressed to the proof-of-concept phase.
For the year 2024, the Bank for International Settlements (BIS) has made automating compliance for cross-border transactions through Project Mandala a top priority. This project was officially added to their work plan on January 23rd.
The project also aligns with the G20 priority actions for enhancing cross-border payments.
Automated compliance checks in cross-border transactions
In the explanatory video for Project Mandala, the Bank for International Settlements explained that during the proof-of-concept stage, various participating institutions such as commercial banks, central banks, and other regulated financial entities will each run a Mandala node within their own systems.
Users can communicate directly with each other using a messaging platform designed for this purpose. This platform will enable them to access pertinent policies related to their transactions. Once relevant information is shared, the system automatically collects it to produce evidence of conformity and handle any additional details required for automatic compliance verification procedures.
In the Mandala system, laws from different areas are kept in a central database and shared among those who need it. This data is then used in conjunction with consumer transaction information to make sure that international transactions adhere to regulations.
The system implements zero-knowledge proofs to complete transaction compliance checks privately. ZK-proofs allow a prover to convince a verifier that a particular claim is true without revealing the details of the claims.
BIS “optimistic” about early results
According to Maha El Dimachki, who leads the BIS Innovation Hub in Singapore, the central bank is encouraged by the promising early outcomes of Project Mandala and believes they could significantly improve cross-border payment systems.
As a crypto investor, I’ve been excited to learn about Mandala’s innovative strategy. They are leading the way by designing their system with compliance in mind, aiming to enhance cross-border transactions without jeopardizing user privacy or the robustness of regulatory checks.
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2024-10-28 13:20