In its new research examining on-chain and off-chain data, the Bank for International Settlements stated that flows to cryptocurrency exchanges are economically important and significant, and introduced the cryptocurrency project Project Atlas. The international financial institution, which includes 63 central banks representing countries from around the world, believes that its Project Atlas could support future cryptocurrency regulations.

Project of the Bank for International Settlements: Project Atlas

In the latest study published by the Bank for International Settlements, Project Atlas, a new decentralized finance data platform, was introduced. It is believed that Project Atlas could support regulations for cryptocurrency market actors. The proof-of-concept report, published jointly with the central banks of the Netherlands and Germany, stated that Project Atlas was initially used to map significant off-chain international flows between #kripto currency exchanges.

"We are developing an important new public good for central banks globally. Data on cross-border flows relates to areas such as payments and macroeconomic analysis," said Cecilia Skingsley, Head of Innovation Center at the Bank for International Settlements. said.

In the study, which initially examined transactions on the Bitcoin (BTC) network, "Although relatively small compared to the total on-chain network traffic, the flows detected between cryptocurrency exchanges are economically significant and large. The data provided by Project Atlas serves as a starting point for preliminary evaluations." "and can provide support in the preparation of data reporting requirements and regulation of actors in the cryptocurrency market." statements were included.

Central banks want to learn better about risks in markets that are often difficult to understand. In this regard, the Bank for International Settlements first put forward the idea of ​​a "cryptocurrency market intelligence platform" in June 2022. Indeed, more recent crises, such as the collapse of the cryptocurrency exchange FTX, have increased the importance of developing the project, as they once again reveal the dangers of unregulated actors operating in opaque markets.

70 Percent of Trading Activity on Cryptocurrency Exchanges Is Misleading

The report published by the Bank for International Settlements, which brings together central banks from around the world, warns that crypto data can be "manipulated or distorted". The report also included figures showing that 70 percent of trading activity on some cryptocurrency exchanges is provided by wash trading, which is considered illegal and is done by buying and selling the same asset in order to mislead and manipulate the markets.

Due to the negative claims surrounding the cryptocurrency market, major centralized cryptocurrency exchanges such as Binance are trying to allay investors' concerns by sharing details of the wallets they control. This regulation is called the Proof of Reserve report, and the Bank for International Settlements believes that the Proof of Reserve report can be used to bring new approaches to data-driven auditing in the future.