The Bank for International Settlements (BIS) has developed a proof-of-concept (PoC) system for tracking on-chain and off-chain transactions on cryptocurrency exchanges and public blockchains, including Bitcoin.
The Bank for International Settlements, in partnership with Deutsche Bundesbank, ABN AMRO, the European Central Bank and the Bank of France, has announced a successful PoC called Project Atlas to measure the macroeconomic relevance of cryptocurrency markets and decentralized finance (DeFi) protocols. sex.
Bank for International Settlements Innovation Center publish The details of the concept are intended to provide insights, information and economic impact on the industry, pointing to the lack of transparency and potential risks to financial stability that have been characterized by major failures in the cryptocurrency space, such as the 2022 Terra/LUNA algorithm stablecoin collapse.
The project combines off-chain data from cryptocurrency exchanges with on-chain data from public blockchains collected by nodes. The first iteration of the proof of concept saw Project Atlas track cryptocurrency flows across geographic locations.
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The original approach used transactions on centralized exchanges in the Bitcoin network, and the location of these exchanges as a proxy for cross-border capital flows.
This approach states that traffic is likely a lower-bound estimate of actual trading volume, given that the country in which the exchange is located is not easily discernible. Still, preliminary pilots of Project Atlas show that mutual exchange can be economically “significant and substantive.”
In its current iteration, Project Atlas’ front-end displays dashboards that visualize the results of data aggregation and analysis, including on-chain transfers and global fund flows.
The PoC aims to provide an overview of cross-border flows and will provide central banks with a means to assess the relative economic importance of the cryptocurrency ecosystem in different jurisdictions:
“The data will allow for a structural analysis of flows and investigation of the impact of price shocks, financial market developments and country characteristics on cryptocurrency flows.”
The project will continue to integrate more data sources and enter the next phase of development, while extracting and analyzing data from Ethereum network nodes and DeFi protocols is also in progress.
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