BIS, EU central banks building data platform to track crypto, DeFi flows

The Bank of International Settlements (BIS) has developed a impervious of conception (PoC) for a strategy tracking on-chain and off-chain transactions from cryptocurrency exchanges and nationalist blockchains including Bitcoin.

Working with the Deutsche Bundesbank, De Nederlandsche Bank, European Central Bank and the Bank of France, BIS has announced a palmy PoC called Project Atlas that aims to gauge the macroeconomic relevance of cryptocurrency markets and decentralized concern (DeFi) protocols.

The BIS Innovation Hub published details of the conception which aims to supply insights, accusation and economical implications of the sector, citing a deficiency of transparency and imaginable risks to fiscal stableness characterized by high-profile failings successful the crypto-space similar the Terra/LUNA algorithmic stablecoin illness successful 2022.

Project Atlas's archetypal impervious of conception aims to way on-chain and off-chain information from nationalist blockchains and cryptocurrency exchanges. Source: BIS Project Atlas

The task combines off-chain information from cryptocurrency exchanges with on-chain information from nationalist blockchains gathered by nodes. The archetypal iteration of the impervious of conception saw Project Atlas tracking cryptocurrency flows crossed geographical locations.

Related: Ripple joins BIS cross-border payments task force

The archetypal attack uses transactions attributed to centralized exchanges successful the Bitcoin network, on with the determination of those exchanges arsenic a proxy for cross-border superior flows.

The methodology notes that flows are apt lower-bound estimates of existent transaction volumes, fixed that the state determination of exchanges is not easy discernible. Nevertheless Project Atlas’ archetypal aviator indicates that inter-exchange are “significant and important economically.”

The Project Atlas dashboard amusement on-chain transfers connected the Bitcoin web arsenic good arsenic cross-exchange transactions. Source: BIS Project Atlas

In its existent iteration, Project Atlas features a front extremity showcasing dashboards which visualise the results of information aggregation and analysis, including on-chain transfers arsenic good arsenic planetary question of funds.

The PoC is acceptable to supply an overnview of cross-border flows and volition supply a means for Central Banks to measure the comparative economical value of the cryptocurrency ecosystem crossed antithetic jurisdictions:

“The information volition let flows to beryllium analyzed structurally and the power of terms shocks, fiscal marketplace developments and state characteristics connected crypto flows to beryllium investigated.”

The task is acceptable to proceed incorporating much information sources to determination into the adjacent signifier of development, portion extracting and analyzing information from Ethereum web nodes is besides successful the pipeline arsenic good arsenic DeFi protocols.

Magazine: Blockchain detectives: Mt. Gox illness saw commencement of Chainalysis