The Bank for International Settlements (BIS) has recently announced the launch of Project Atlas, in collaboration with central banks within the Eurosystem. This proof of concept aims to delve into the economic implications of crypto assets and decentralized finance (DeFi). The BIS Innovation Hub Eurosystem Centre, De Nederlandsche Bank, and the Deutsche Bundesbank have joined forces to streamline the data collection process from various crypto exchanges and public blockchains.
An Innovative Approach
Project Atlas focuses on improving data collection methodologies and platform development within the crypto industry. Currently, valuable data is scattered across multiple protocols, market actors, and jurisdictions, with reporting often lacking regulation or standardization. Streamlining this process will provide valuable insights into the industry’s macroeconomic impact.
The primary objective of Project Atlas is to enable central banks and financial institutions to gain a deeper understanding of the crypto industry. By assessing both on and off-chain data and standardizing collection and monitoring methodologies, this initiative will fill the knowledge gap that currently exists. The project report highlights the use of transactions between crypto exchanges in the Bitcoin network and their geographical locations as a proxy for cross-border capital flows.
The BIS has been at the forefront of emphasizing the need for legal clarity in central bank digital currency (CBDC) development. Agustín Carstens, the BIS general manager, previously stated that nearly 80% of central banks lack the legal authority or face unclear parameters to issue a digital currency under their existing regulations. This emphasis on regulatory clarity extends to the BIS’s exploration of the crypto industry through Project Atlas.
The launch of Project Atlas marks an important stride toward better understanding the nascent crypto industry. Central banks and financial institutions recognize the necessity of staying abreast of technological advancements, such as DeFi, that have the potential to revolutionize financial services. The initiative aligns with the ongoing discussions within the crypto community about the opportunities and challenges presented by DeFi.
Project Atlas is just one of many initiatives undertaken by the BIS and other global financial institutions to comprehend and potentially regulate the crypto industry. As the industry continues to rapidly evolve, central banks are taking proactive measures to acquire the knowledge needed to shape future policies effectively.
With the launch of Project Atlas, the BIS and its partners are spearheading a pioneering endeavor to explore the economic impact of crypto assets and DeFi. By streamlining data collection methodologies and standardizing practices, central banks aim to gain valuable insights into this rapidly growing industry. The BIS’s commitment to regulatory clarity and bridging the knowledge gap reflects their recognition of the transformative potential of the crypto industry. As global financial institutions continue to invest in understanding and regulating the technology, Project Atlas stands as a testament to their dedication to staying ahead of the curve.