BIS and Partners Launch Project Atlas: Enhancing Crypto Surveillance for Regulator
- The Bank for International Settlements (BIS), in collaboration with Eurosystem, De Nederlandsche Bank, and Deutsche Bundesbank, has initiated Project Atlas, aiming to enhance surveillance of the cryptocurrency market.
- Project Atlas addresses the information gap identified in the BIS report “Mapping the world of decentralized finance” and seeks to provide regulators and central banks with a unified analytics platform for monitoring the crypto market.
In a significant move, the Bank for International Settlements (BIS) has joined forces with Eurosystem, De Nederlandsche Bank, and Deutsche Bundesbank to introduce Project Atlas, a strategic initiative designed to enhance surveillance within the rapidly expanding world of cryptocurrencies. This collaborative effort, revealed via a tweet by Sam Callahan, is a response to the critical information gap identified in the BIS report titled “Mapping the world of decentralized finance,” published in October.
The BIS report emphasized the substantial lack of reliable, tailored data concerning the ever-evolving cryptocurrency market. While the crypto space offers significant advantages, it also poses risks that regulators and central banks need to monitor closely. Project Atlas is intended to fill this void by collecting intricate data from cryptocurrency exchanges and comprehensive on-chain Bitcoin data, which will be integrated into a unified analytics platform.
In Sam Callahan’s own words, this platform will serve as a tool “for regulators and central banks to use for surveillance.”
Project Atlas is designed to create an infrastructure for collecting granular and aggregate data relevant to the mandates of central banks. This data will be drawn from both public and proprietary sources, further underlining the project’s robustness and commitment to providing accurate information to regulators.
Mechanics of Project Atlas
A closer look at the mechanics of Project Atlas reveals its plan to operate a Bitcoin node to ensure the accurate collection of on-chain data. Simultaneously, data will be gathered from exchanges, linking addresses to their respective entities or individual users.
The proof-of-concept demonstrates a blueprint for analyzing cross-border Bitcoin movements between various exchanges, with exchange locations serving as a vital data point. The data collection follows a structured three-step methodology:
- Grouping addresses controlled by the same entity.
- Illustrating the flow dynamics between these entity-controlled addresses within a holistic network.
- Most crucially, associating these addresses with the entities or individuals they represent.
This approach implies that, by amalgamating exchange data with on-chain information, the system is poised to surveil individuals more effectively. However, the BIS acknowledges challenges in monitoring services like CoinJoin, which may hinder their surveillance capabilities.
The launch of Project Atlas represents a significant step in improving the surveillance and regulatory oversight of the cryptocurrency market, ensuring that the evolving financial landscape is closely monitored and understood by central banks and regulators.
