BIS unveils global platform to monitor crypto flows

Bank for International Settlements (BIS) has developed a prototype of a system for tracking Bitcoin transfers. Its primary aim is to provide authorities with in-depth insights into cryptocurrency usage. This initiative, known as Atlas, is being jointly implemented by notable banks such as Deutsche Bundesbank, European Central Bank, De Nederlandsche Bank, and Bank of France.

The start of this project dates back over а five years when it initiated at the BIS Innovation Hub. A team of experts has created a prototype platform designed to aggregate data from both publicly accessible blockchains and more restricted sources, such as data provided by crypto exchanges.

The data gathered by this system offers a comprehensive overview of crypto market activities. The BIS prototype generates informative dashboards that present the volume of Bitcoin conversions into US dollars at particular time in designated global regions. Furthermore, it has the capability to visualise the degree of incidence of cryptocurrencies and the market size.

The BIS report emphasises the necessity for central banks to have access to comprehensive data concerning cryptocurrencies and the decentralised finance (DeFi) sector. This data is crucial for assessing both opportunities and potential risks that these digital assets pose to the financial system.

BIS experts say that having detailed insights into crypto transactions is of particular importance for central banks in the context of cross-border payments, economic analysis, and the balance of payments statistics. This newly proposed monitoring system could serve as a foundation for the regulation of the crypto industry.

Currently, there are plans to expand the range of data sources integrated into this project. This expansion will enable the project to advance to its next developmental stage, allowing for the extraction and analysis of data from Ethereum network nodes and DeFi protocols.

It is worth noting that previously, BIS and the Federal Reserve Bank of New York established an innovation centre, tasked with developing and testing new financial technologies.