Central Banks Of Germany, Netherlands, And BIS Collaborate In Project Atlas To Track Bitcoin Movement

JAKARTA - Three major financial institutions, including the Central Bank of Germany, the Netherlands, and the Bank for International Settlements (BIS), joined a collaborative project called Project Atlas. The purpose of the project is to develop a prototype monitoring system that can actively track the international flow of Bitcoin.

Project Atlas's "proof of concept" platform combines data from crypto exchanges and public blockchains collected by nodes. The platform is designed to provide data tailored to cross-border flows for central banks and financial regulators.

In this concept, the system will track the flow of crypto assets between different locations using Bitcoin network transactions connected to crypto exchanges and their geographic location as a proxy for cross-border capital movement. However, the report acknowledges the potential inaccuracies in this data due to the anonymous nature of crypto wallets that can be created without revealing the user's location.

Preliminary findings from Project Atlas suggest that although the flow between crypto exchanges is a relatively small part of overall on-chain network activity, they have important economic significance. Central banks and financial regulators need to understand DeFi's crypto assets and markets, but reliable and customized data are still lacking.

The BIS report also noted other problems in the cryptocurrency market, including vulnerabilities in the DeFi project and the liquidity crisis that occurred in 2022.

To help policymakers, Project Atlas has a dashboard that displays data visualization and analysis results. The dashboard includes the flow of total converted crypto assets to the US dollar as well as the number of transactions on the network, which can provide insight into the adoption and significance of the crypto market.

This data and dashboard platform will be shared with other central banks to gather input and thoughts on how to improve it. Thus, Project Atlas can be an important step in understanding and supervising the development of cryptocurrencies at the international level.