BIS, EU central banks building data platform to track crypto, DeFi flows
The Bank for International Settlements (BIS) has developed a proof-of-concept (PoC) for a system tracking on-chain and off-chain transactions from cryptocurrency exchanges and public blockchains, including Bitcoin.
Working with the Deutsche Bundesbank, De Nederlandsche Bank, the European Central Bank and the Bank of France, the BIS has announced a successful PoC called Project Atlas to gauge the macroeconomic relevance of cryptocurrency markets and decentralized finance (DeFi) protocols.
The BIS Innovation Hub published details of the concept, which aims to provide insights, information and economic implications of the sector, citing a lack of transparency and potential risks to financial stability characterized by high-profile failings in the crypto-space like the Terra ecosystem collapse in 2022.
The project combines off-chain data from cryptocurrency exchanges with on-chain data from public blockchains gathered by nodes. The first iteration of the proof-of-concept saw Project Atlas tracking cryptocurrency flows across geographical locations.
Related: Ripple joins BIS cross-border payments task force
The initial approach uses transactions attributed to centralized exchanges in the Bitcoin network, along with the location of those exchanges, as a proxy for cross-border capital flows.
The methodology notes that flows are likely lower-bound estimates of actual transaction volumes, given that the country location of exchanges is not easily discernible. Nevertheless, Project Atlas’s initial pilot indicates that inter-exchange is “significant and substantial economically.”
In its current iteration, Project Atlas features a front end showcasing dashboards that visualize the results of data aggregation and analysis, including
Read more on cointelegraph.com
