BIS & Central Banks To Integrate “Mandala”, Aiding Cross-boarder Crypto Transactions

The Bank of International Settlement and various other central banks have collaborated to integrate “Mandala” in an attempt to help ease cross boarder transactions, including crypto transactions.

The decentralized system Mandala, which integrates with both traditional payment messaging systems like Swift and emerging digital asset settlement systems

It has allowed the Bank for International Settlements (BIS) and central bank partners like Australia, South Korea, Malaysia, and Singapore to show that regulatory compliance can be incorporated into cross-border transaction agreements.

Additionally, the system can verify compliance proof without disclosing underlying customer data.

The experiments come after dozens of financial institutions collaborated on ground-breaking projects that showed Swift’s capacity to link various digital networks, technologies, and asset classes.

The move comes in tandem with other global players, keeping the Asia Pacific geography at par with others in the sector. Singing the same tone, previously, banks in North America, Europe, and Asia had also employed Swift connectivity to carry out live trials of digital asset and currency transactions.

“Mandala is pioneering the compliance-by-design approach to improve cross-border payments without compromising privacy or the integrity of regulatory checks,” said Maha El Dimachki, Head of the BIS Innovation Hub Singapore Centre.

Mandala Project Stays In Line With G20 Goals

According to MAS official release, with the potential to lower costs and speed up transactions while maintaining regulatory compliance, the project, which has already advanced to the proof of concept stage, is in line with the G20 priority actions for improving cross-border payments.

The safe and secure functioning of the global financial system depends on regulatory frameworks relating to cross-border transactions. However, adhering to various jurisdictional regimes poses difficulties that have raised prices and slowed transaction speeds.

By automating compliance processes, improving the transparency of national rules, and offering real-time reporting and monitoring to regulators and supervisors, Project Mandala seeks to accelerate and improve the efficiency of cross-border transactions.

How Is The Mandala Project Different?

Mandala effectively connects with both established payment messaging platforms like Swift and emerging digital asset settlement systems like a wholesale central bank digital currency.

The Mandala system’s adaptability and modularity in supporting both current financial infrastructures and emerging digital asset ecosystems are guaranteed by this dual integration. Mandala implemented programmable compliance for digital assets, which can be used into smart contracts.

“This collaboration between Singapore, Australia, Malaysia and South Korea to incorporate programmable compliance into payment flows marks a significant development in advancing seamless cross-border financial transactions.” said Sopnendu Mohanty, Chief FinTech Officer, MAS.

They add, “MAS is glad to have contributed to the development of Project Mandala, by extending the architecture of Purpose Bound Money to support capital flow management and sanctions screening”.