The Bank for International Settlements (BIS) and four European central banks have introduced a Proof-of-Concept (PoC) system to monitor the global flow of cryptocurrency assets. The BIS partnered with the European Central Bank, Banque de France, Deutsche Bundesbank, and Nederlandsche Bank to track on-chain and off-chain transactions on public networks, including Bitcoin.
The aim of Project Atlas is to enhance the oversight of crypto assets and their issuers by financial authorities while tracking international asset flows. This project provides regulators with the necessary data to shape policies and make informed decisions.
Market manipulation and the need to protect users are highlighted in the documents. The lack of regulatory control in the DeFi sector has resulted in increased fraud and industry failures that could have been prevented with better data availability. The International Monetary Fund (IMF) and Financial Stability Board (FSB) emphasize the importance of regulatory oversight to avoid undermining government policies.
Project Atlas utilizes robust analytical indices to analyze data and share it with the global central bank community. This allows for structural analysis of flows and investigations into the influence of factors such as price shocks, financial market developments, and country characteristics on crypto flows.
The BIS urges central banks to adopt custom platforms as existing blockchain intelligence sites often provide limited insights tailored to regulatory needs. Tracking and utilizing crypto and DeFi transactions is more challenging than traditional financial assets, increasing the risk of regulatory gaps in the market. Additionally, the current methodology for gathering information across multiple chains lacks transparency, reducing the ability of central banks to gather comprehensive data.
Project Atlas aims to create a safe investment space by minimizing the risks of fraudulent activities and enhancing regulatory oversight.