The Bank for International Settlements (BIS), in collaboration with several European central banks including Deutsche Bundesbank, De Nederlandsche Bank, the European Central Bank, and the Bank of France, has unveiled a groundbreaking initiative known as “Project Atlas.” This proof-of-concept (PoC) system aims to comprehensively track both on-chain and off-chain transactions within the cryptocurrency and decentralized finance (DeFi) sectors.
Enhancing Transparency and Mitigating Risks
Project Atlas seeks to address the prevailing lack of transparency within the cryptocurrency market and the potential risks it poses to financial stability, exemplified by high-profile incidents such as the Terra ecosystem collapse in 2022. By combining data from cryptocurrency exchanges and public blockchains, the project intends to provide valuable insights into the macroeconomic relevance of these sectors.
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Project Atlas’s first proof-of-concept aims to track on-chain and off-chain data from public blockchains and cryptocurrency exchanges. Source: BIS Project Atlas
The project’s initial phase focuses on tracking cryptocurrency flows across various geographical locations. It uses transactions associated with centralized exchanges in the Bitcoin network as a proxy for cross-border capital movements. While acknowledging that these flows represent conservative estimates due to the difficulty in pinpointing exchange locations, Project Atlas has already revealed substantial inter-exchange activity with significant economic implications.
Data Visualization and Future Developments
Project Atlas boasts a user-friendly interface featuring dashboards that visualize data aggregation and analysis, showcasing on-chain transfers and the global movement of funds. This PoC is set to offer central banks a comprehensive overview of cross-border flows and the ability to evaluate the economic significance of the cryptocurrency ecosystem across different jurisdictions.
Project Atlas’s first proof-of-concept aims to track on-chain and off-chain data from public blockchains and cryptocurrency exchanges. Source: BIS Project Atlas
Looking ahead, Project Atlas plans to incorporate additional data sources in its next development phase. It is poised to extract and analyze data from Ethereum network nodes and DeFi protocols, further enhancing its ability to provide insights into the rapidly evolving cryptocurrency landscape.
