REGULATION

BIS Mandala Project: Regulatory Compliance Automation to Shape the Future of Cross-Border Payment Compliance

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BIS Mandala Project: Regulatory Compliance Automation to Shape the Future of Cross-Border Payment Compliance

The Mandala project, a collaboration between the Bank for International Settlements Innovation Hub (BISIH), Reserve Bank of Australia (RBA), Bank of Korea (BOK), Bank Negara Malaysia (BNM), and Monetary Authority of Singapore (MAS), aims to reduce policy and regulatory compliance burdens by automating compliance processes, providing real-time transaction monitoring, and enhancing transparency and visibility of specific country policies.

Continuing the Dunbar Project to Explore Regulatory Coding for Increased Efficiency

The previous Dunbar Project by the BIS developed an experimental multi-CBDC (mCBDC) platform aimed at reducing reliance on intermediaries, thus decreasing the costs and time required for cross-border transactions. However, during the development phase, discussions arose on how to address regulatory disparities across jurisdictions in cross-border payments. What governance arrangements would instill enough confidence among nations to share critical national infrastructure like payment systems?

Today's announcement of the Mandala Project builds upon the discussions of the Dunbar Project, exploring the feasibility of encoding policy and regulatory requirements into universal protocols. The aim is to automate compliance procedures, provide real-time transaction monitoring, and enhance transparency and visibility of specific country policies.

This initiative is a collaborative effort between the Bank for International Settlements Innovation Hub (BISIH) and the central banks of Reserve Bank of Australia (RBA), Bank of Korea (BOK), Bank Negara Malaysia (BNM), and Monetary Authority of Singapore (MAS).

Measures may include quantifiable and configurable foreign exchange rules, as well as anti-money laundering and combating the financing of terrorism (AML/CFT) measures. This aligns with the Financial Stability Board's 2023 priority actions to achieve the G20's goal of enhancing cross-border payments, promoting an efficient legal, regulatory, and supervisory environment for cross-border payments while maintaining their security and integrity.