The Bank for International Settlements (BIS), in collaboration with central banks within the Eurosystem, has announced the launch of Project Atlas, a proof of concept aimed at investigating the economic impact of crypto assets and decentralized finance.
Project Atlas, a joint effort between the BIS Innovation Hub Eurosystem Center, De Nederlandsche Bank and the Deutsche Bundesbank, aims to streamline the data collection process of various crypto exchanges and public blockchains. The project aims to collect data both inside and outside the chain, standardize collection and monitoring methodologies and assess the findings using macroeconomic analyses.
The project’s primary focus is on improving data collection methodology and platform development, as current crypto industry data is spread across numerous protocols, market actors and jurisdictions, with reporting often unregulated or non-standardized. According to the project report, Atlas uses transactions between crypto exchanges in the Bitcoin network and their geographic locations as a proxy for cross-border capital flows.
Broader project
The BIS’ initiative to explore the significance of crypto assets and DeFi is part of a broader trend where central banks and financial institutions are taking steps to better understand and regulate the fast-growing industry.
For example, the BIS previously emphasized the need for legal clarity in the development of central bank digital currencies (CBDC). Agustín Carstens, general manager of the BIS, noted that almost 80% of central banks either do not have the legal authority to issue a digital currency under their current regulations or face unclear legal parameters.
The BIS’s exploration of the crypto industry and Project Atlas is an important step toward a deeper understanding of this emerging industry. The effort reflects the continued development of CBDCs and an ongoing discourse in the crypto community about the potential and pitfalls of DeFi.
Project Atlas is just the latest in a series of efforts by the BIS and other global financial institutions to understand and potentially regulate the technology.
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