Bank for International Settlements Takes on Crypto Tracking with EU Central Banks

The Bank for International Settlements (BIS) and four European central banks have collaborated on a Proof-of-Concept (PoC) system aimed at monitoring the global flow of cryptocurrency assets. This partnership involves the BIS, the European Central Bank, Banque de France, Deutsche Bundesbank, and Nederlandsche Bank. The objective of Project Atlas is to improve how financial authorities handle crypto assets and their issuers while tracking international asset flows. The system will enable regulators to gather data from both on-chain and off-chain transactions, providing them with the necessary information to shape policies effectively.

Market Manipulation: The Need to Protect Users

One of the key challenges in the crypto industry is the lack of regulation, which has led to increased fraud and industry implosions. To address this issue, Project Atlas utilizes robust analytical indices to break down data and share it with the global central bank community. The data collected will enable regulators to conduct structural analyses and investigate the impact of price shocks, financial market developments, and country characteristics on crypto flows. By doing so, authorities can better protect users and prevent fraudulent activities.

BIS Urges Central Banks to Adopt Custom Platforms

The BIS argues that although many blockchain intelligence sites provide insights on crypto transactions, the information available is often limited and not tailored to the specific needs of regulators. Additionally, tracking and utilizing crypto and DeFi transactions is more challenging than traditional financial assets, making it risky for regulators. Moreover, gathering information across multiple chains is often a complex process, making it difficult for central banks to obtain comprehensive data. Finally, bad actors and industry executives may manipulate key data, such as transaction volumes, to gain an unfair advantage.

To address these challenges, Atlas provides central bank regulators with a customized platform that enables them to effectively track and analyze crypto transactions. By adopting this platform, central banks can create a safer investment environment for all stakeholders, minimizing the risks of fraudulent activities.

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