International payments have long been hindered by the complex web of policies and regulations that differ from one country to another. These disparities not only make compliance a daunting task but also lead to extended transaction times and uncertainty for all parties involved.
Enter “Project Mandala,” the brainchild of BIS and a consortium of central banks, aiming to simplify the intricate landscape of policy and regulatory compliance. Through automation, this initiative seeks to streamline compliance processes, monitor transactions in real-time, and provide better clarity on country-specific policies.
This initiative follows in the footsteps of “Project Dunbar,” another ambitious endeavor by BIS focused on exploring a multi-central bank digital currency (mCBDC) platform.
BIS envisions that this compliance-focused approach could enhance the efficiency of international transfers, including various digital assets like CBDCs and tokenized deposits. Moreover, this innovative framework may become the cornerstone of compliance for both established and emerging payment systems, whether they are wholesale or retail.
To ensure the system’s efficiency and reliability, several measures are under consideration, including clear and adaptable foreign exchange regulations, and robust measures against money laundering (AML) and the financing of terrorism (CFT).
