The Bank for International Settlements (BIS) has progressed its cross-border payments initiative, Project Mandala, a blockchain-based payment solution for cross-border transactions, to the proof-of-concept stage.
According to an October 28 statement by the institution, during this proof-of-concept phase, all participant institutions, including commercial banks, central banks and other regulated financial entities, will operate a Mandala node within their systems.
Notably, the BIS claimed that the project now includes nodes operated by participant institutions, such as central and commercial banks, for peer-to-peer interactions.
The project was developed by the BIS Innovation Hub Singapore Centre in collaboration with central banks from Australia, Korea, Malaysia, and Singapore, with the aim of simplifying compliance in international transactions while safeguarding user privacy.
The project uses zero-knowledge (ZK) proofs as the underlying technology to achieving privacy. The BIS claimed that the technology enables parties to confirm regulatory adherence without disclosing sensitive transaction details.
Using a shared messaging system, the Mandala protocol will access relevant policies for transactions, generate compliance proofs, and manage necessary data for automated regulatory checks. The system operates with a distributed repository of jurisdiction-specific rules and matches these rules against transaction data to verify compliance.
Maha El Dimachki, head of the BIS Innovation Hub Singapore Centre, expressed optimism about the project, highlighting Mandala’s potential to improve transaction efficiency without compromising regulatory rigour or privacy.
According to the BIS, this compliance-by-design model aligns with the G20’s priorities for enhancing cross-border payments.
In related news, the BRICS nations officially launched their long-anticipated cross-border payment system, “BRICS Pay,” on October 17 during the BRICS Business Forum in Moscow. This blockchain-based platform is designed to streamline transactions among member nations.
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