'Project Atlas' Launched by BIS to Monitor Cryptocurrency Transactions Globally
Summary:
The Bank of International Settlements (BIS) is working on a project called Project Atlas, aimed at monitoring on-chain and off-chain cryptocurrency transactions. Collaborating with several major banks, the first iteration of this project traces cryptocurrency circulation across different regions. The initial approach uses transactions and the location of centralized exchanges in the Bitcoin network as proxies for cross-border capital flows. The project currently visualizes data showcasing global funds movement and on-chain transfers and will allow structural analysis of flows and price shocks influence in crypto markets. Future steps include extracting data from Ethereum network nodes and DeFi protocols.
The Bank of International Settlements (BIS) has initiated a proof of concept (PoC) dubbed Project Atlas aimed at monitoring both on-chain and off-chain cryptocurrency transactions. This initiative involves collaboration with the Deutsche Bundesbank, De Nederlandsche Bank, European Central Bank, and the Bank of France. Project Atlas seeks to understand the macroeconomic significance of cryptocurrency markets and decentralized finance (DeFi) systems.
BIS Innovation Hub brought forward the concept details, focusing on enhancing industry understanding, increasing transparency, and addressing financial stability risks, such as witnessed in the 2022 collapse of Terra/LUNA algorithmic stablecoin.
Project Atlas's initial PoC aims to monitor data from cryptocurrency exchanges and public blockchains. The project brings together off-chain data gathered from cryptocurrency exchanges and on-chain information collected by nodes from public blockchains. The first iteration of Project Atlas effectively traced cryptocurrency circulation across different regions.
Centered around transactions attributed to centralized exchanges in the Bitcoin network, the initial approach also takes into account the locations of these exchanges as representatives for cross-border capital circulation. Although the country location of exchanges remains hard to identify, making actual transaction volumes appear lower, Project Atlas during its pilot program signaled economically substantial inter-exchange flows.
In its current form, Project Atlas displays a front end that showcases dashboards, providing visuals of the data gathered and analyzed, and highlighting global funds movement as well as on-chain transfers.
This PoC aims to provide an overview of cross-border flows, helping central banks understand the economic impact of the cryptocurrency ecosystem in various jurisdictions. It will enable the analysis of structural flows and the investigation of the effect of price shocks, financial market developments, and country features on crypto flows.
Project Atlas is poised to integrate more data sources for its development's next phase. It also plans to extract and analyze data from Ethereum network nodes along with DeFi protocols, forming future steps.
Published At
10/4/2023 10:53:27 AM
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