The Bank for International Settlements (BIS) and its central bank partners have launched a project which explores the feasibility of encoding jurisdiction-specific policy and regulatory requirements into a common protocol for cross-border use cases.

Known as Project Mandala, the new project looks to automate compliance procedures, provide real-time transaction monitoring and increase transparency and visibility around country-specific policies.

The project has been developed by BIS and the Singapore Centre, Reserve Bank of Australia (RBA), Bank of Korea (BOK), Bank Negara Malaysia (BNM), and Monetary Authority of Singapore (MAS).

BIS said disparate policy and regulatory frameworks between different jurisdictions are among the chief obstacles to smooth and efficient cross-border payments.

Project Mandela 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.

In exploring the challenges, the project also aims to address key challenges identified during Project Dunbar, a 2022 project which proved that financial institutions could use CBDCs issued by participating central banks to transact directly with each other on a shared platform.

BIS and the central banks of France, Singapore, and Switzerland recently succeeded in testing cross-border wholesale CBDCs.

The project trialled the international trading and settlement of hypothetical euros, Singapore dollars, and Swiss francs between simulated financial institutions, using new decentralised finance (DeFi) technology on a public blockchain.

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