BIS And EU Central Banks Launches ‘Project Atlas’ To Trace And Collect DeFi Data

The Bank of International Settlements, De Nederlandsche Bank, and Deutsche Bundesbank are developing a system to track international flows of cryptocurrencies.

‘Project Atlas’, aims to streamline the data collection process of on-chain and off-chain transactions from various crypto exchanges and public blockchains including Bitcoin. In addition, the project also aims to standardize collection and monitoring methodologies and assess findings against macroeconomic analysis.

The current data on the crypto industry is scattered across numerous protocols, market actors, and jurisdictions, with reporting often unregulated or non-standardized that’s why Project Atlas focuses primarily on improving data collection methodology and platform development. 

The initial approach uses transactions attributed to centralized exchanges in the Bitcoin network, together with the location of those exchanges, as a proxy for cross-border capital flows.

Moreover, the methodology notes that flows are likely lower-bound estimates of actual transaction volumes, given that the country location of exchanges can’t easily be seen. Nevertheless, Project Atlas’ initial plan indicates that inter-exchange is “significant and substantial economically.”

BIS’s initiative to explore the importance of crypto assets and DeFi is part of a larger trend of central banks and financial institutions taking steps to fully understand and regulate the rapidly growing industry. For instance, BIS previously emphasized the necessity of legal clarity in central bank digital currency development. 

Furthermore, the BIS’s exploration of the crypto industry and Project Atlas is a significant move toward gaining a deeper understanding of the industry. As such, the effort reflects the continuous development of CBDCs and an ongoing discourse in the crypto community about the potential and risks of DeFi.