The Bank for International Settlements (BIS), in collaboration with several APAC central banks and financial institutions, has announced a project to enshrine jurisdiction-specific cross-border regulations in one universal protocol.
BIS Innovation Hub (BISIH) Singapore Centre, Reserve Bank of Australia (RBA), Bank of Korea (BOK), Bank Negara Malaysia (BNM) and Monetary Authority of Singapore (MAS) have established Project Mandala through which the protocol will cover use cases including foreign direct investment, borrowing and payments.
“Disparate policy and regulatory frameworks between different jurisdictions are among the chief obstacles to smooth and efficient cross-border payments,” a statement from the association said.
“They contribute to the regulatory compliance burden across the payment chain, increase the time for cross-border transactions and introduce uncertainties among stakeholders.
“Project Mandala… seeks to ease the policy and regulatory compliance burden by automating compliance procedures, providing real-time transaction monitoring and increasing transparency and visibility around country-specific policies.”
The project will also tackle challenges recognised during Project Dunbar which established a prototype multiple central bank digital currency (mCBDC) platform.
Project Mandala continues the efforts of Project Dunbar to implement the infrastructure to enable more efficient and secure cross-border transfer of digital assets including CBDCs and tokenised deposits, as well as establish the foundations for compliance of payment systems.
“The measures could include quantifiable and configurable foreign exchange rules, as well as anti-money laundering and countering the financing of terrorism (AML/CFT) measures,” the statement said.
“Project Mandala aligns with the Financial Stability Board 2023 priority actions for achieving the G20 targets for enhancing cross-border payments in the area of promoting an efficient legal, regulatory and supervisory environment for cross-border payments while maintaining their safety, security and integrity.”