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Project Mandala, led by the Bank for International Settlements (BIS) and partnered with central banks from multiple nations, is showcasing how automated compliance can be integrated seamlessly into cross-border transactions. This collaborative initiative involves 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).
On October 28, BIS revealed that Project Mandala has reached its proof-of-concept phase, marking a significant milestone in its mission to simplify regulatory compliance for international payments. Initially included in BIS’s 2024 work program, Project Mandala also supports G20’s objectives for improving cross-border payments.
Innovative Compliance Checks Using Automated Technology
Through the Project Mandala framework, participating institutions—including commercial and central banks as well as other regulated entities—operate Mandala nodes within their systems. This system utilizes a peer-to-peer messaging network to automatically retrieve relevant policies and requirements for each transaction. The platform ensures that cross-border transactions comply with regional rules and standards by using a data repository that applies regulatory rules from multiple jurisdictions to each transaction in real time.
A key technological feature of Project Mandala is its use of zero-knowledge proofs (ZK-proofs), which allows transaction compliance to be verified without revealing sensitive details. ZK-proofs ensure that a transaction meets compliance standards while preserving the privacy of involved parties.
Positive Reception and Future Prospects
BIS Innovation Hub Singapore Centre’s head, Maha El Dimachki, expressed optimism regarding Project Mandala’s initial results, describing it as a pioneering “compliance-by-design” approach. El Dimachki emphasized that Mandala could transform cross-border payment systems by enhancing compliance while protecting privacy and maintaining the integrity of regulatory processes.
The BIS anticipates that Project Mandala will set a new standard for secure, compliant, and efficient cross-border payments, supporting a seamless global financial network in line with international regulatory expectations.
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