The Bank for International Settlements (BIS), in collaboration with Eurosystem central banks, unveils Project Atlas, a proof of concept endeavor focused on assessing the economic implications of crypto assets and decentralized finance.
Project Atlas, a collaborative initiative involving the BIS Innovation Hub Eurosystem Centre, De Nederlandsche Bank, and the Deutsche Bundesbank, seeks to enhance the data collection process from diverse cryptocurrency exchanges and public blockchains. The project’s objectives include aggregating data from both on and off-chain sources, standardizing data collection methods, and evaluating findings in the context of macroeconomic analysis.
The central emphasis of the project is to enhance data collection techniques and develop a unified platform. The crypto industry currently suffers from fragmented data spread across various protocols, market participants, and jurisdictions, often lacking proper regulation and standardization. According to the project’s report, Atlas leverages Bitcoin network transactions between crypto exchanges and their geographical locations as a proxy for monitoring cross-border capital flows.
The BIS’s endeavor to investigate the importance of crypto assets and DeFi is part of a larger trend wherein central banks and financial institutions are actively working to gain a deeper understanding of and implement regulations for the swiftly expanding cryptocurrency sector.
As an example
the BIS has previously underscored the importance of legal clarity in the development of central bank digital currencies (CBDCs). Agustín Carstens, the BIS’s general manager, pointed out that nearly 80% of central banks either do not possess the legal authority to issue a digital currency within their existing regulatory framework or encounter ambiguity regarding legal boundaries.
The BIS’s foray into the crypto industry, including Project Atlas, represents a significant step toward acquiring a more profound comprehension of this emerging sector. This initiative mirrors the ongoing evolution of central bank digital currencies (CBDCs) and the ongoing discussion within the crypto community regarding the possibilities and challenges of DeFi.
Project Atlas is merely the most recent endeavor in a sequence of initiatives undertaken by the BIS and other international financial institutions aimed at comprehending and potentially regulating this technology.
