- The Bank for International Settlements has designed a platform to help central banks track Bitcoin trading activities.
- The platform will draw data from on-chain and off-chain trading activities.
- A test group of central banks will use the platform to map Bitcoin trading activities in different regions.
The Bank for International Settlements (BIS) – a global central bank that serves other central banks – has designed a system to help authorities track Bitcoin trading activities across the world, Reuters reported. According to BIS, the monitoring system will give authorities “a clearer picture of how, when, and where the cryptocurrency is used.”
Work on the project codenamed Atlas started five years ago at the Dutch Central Bank – a member of BIS. However, BIS said recent happenings within the crypto ecosystem have affected the platform’s potential value.
Notably, the crypto ecosystem since last year has been a mash of institutional collapses, bankruptcies, market volatility, and regulatory onslaughts. Large crypto entities like FTX and Terra Luna collapsed, creating a prolonged bear market that spilled into 2023.
According to the report, the monitoring system is a “proof-of-concept” platform that relies on data from on-chain and off-chain activities. BIS mentioned that monitoring and tracking cross-border crypto flows is a concern for central banks. Thus, the central banks can get insight into the adoption rate and crypto activities in different regions through the monitoring system.
Furthermore, BIS mentioned that the data already collected from the platforms showed a substantial and uneven distribution of crypto activities across many countries. While noting the problems associated with the anonymous nature of cryptocurrency transactions, BIS added that pinpointing the precise transaction data may be complex.
The monitoring systems will be made available to a group of test central banks. BIS said the platform features dashboards that show data about Bitcoin transactions and conversions into U.S. dollars at certain times in certain parts of the world.
As cryptocurrencies gained in relevance, central banks have hastened to track activities within the space. So far, a slew of central banks have announced plans to launch central bank digital currencies (CBDC) to take advantage of blockchain technology.
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