- BIS partners with central banks to streamline cross-border transactions by embedding real-time compliance checks into both traditional and digital systems.
- Project Mandala automates regulatory compliance in cross-border payments using zero-knowledge proofs, ensuring privacy while maintaining regulatory standards.
The Bank for International Settlements (BIS), in partnership with the central banks of Singapore, Australia, South Korea, and Malaysia, is developing global payment systems through the Project Mandala project.
This project marks a major advance in cross-border transaction efficiency by directly including regulatory compliance into the transaction flow.
Different regulatory systems among nations have historically presented major obstacles to smooth international payments, leading to longer transaction times and more compliance load. Mandala wants to reverse that, though, by including automated compliance tools right into the system itself.
Mandala Leverages ZK-Proofs for Enhanced Compliance and Privacy
Zero-knowledge proofs (ZK-proofs) are fundamental to Mandala’s architecture since they let one verify regulatory compliance without revealing private consumer data. This approach guarantees that consumer privacy is not violated even while compliance is kept.
Mandala streamlines the whole transaction process by combining modern technology like Central Bank Digital Currency (CBDCs) with already-in-use platforms like SWIFT. The initiative has already effectively shown its ability in cross-border funding during the proof-of-concept stage, involving capital investment deals between Australia and South Korea.
The real-time compliance tests of the initiative transform the banking sector. By means of its decentralized peer-to-peer messaging system, Mandala offers instantaneous transaction data analysis, hence lowering delays and uncertainty.
Given the increasing frequency of digital assets and tokenized deposits, this method could perhaps be a basic layer for the next worldwide payment systems. The project also fits with international initiatives such as the G20’s aims of enhancing cross-border payments by means of an efficient, transparent, and transparent regulatory environment.
Blockchain technology’s uses in the financial industry are widening as it develops. According to CNF earlier on, DBS Bank started blockchain-based token services meant to improve institutional workflow and liquidity control.
This invention reflects Singapore’s encouraging legal environment, which has been essential in promoting blockchain and digital assets’ acceptance all throughout Southeast Asia.
Source: https://www.crypto-news-flash.com/bis-and-central-banks-collaborate-for-efficient-global-payments/?utm_source=rss&utm_medium=rss&utm_campaign=bis-and-central-banks-collaborate-for-efficient-global-payments