Photo: Cecilia Skingsley

Project Atlas explores economic significance of cryptoassets and DeFi

20 October 2023

BIS, De Nederlandsche Bank and the Deutsche Bundesbank are creating a data platform that has potential to shed light on the macroeconomic relevance of cryptoasset markets and decentralised finance (DeFi). Project Atlas combines on- and off-chain information, creating a layered approach to data vetting and tailored statistics for central banks. A first proof of concept was developed focusing on international flows of cryptoassets. The Bank for International Settlements (BIS) and its partner central banks within the Eurosystem have developed a proof of concept to explore the macroeconomic relevance of cryptoasset markets and DeFi. Project Atlas, a collaborative effort by the BIS Innovation Hub Eurosystem Centre, De Nederlandsche Bank and the Deutsche Bundesbank, combines data gathered from crypto exchanges (called off-chain data) with granular data extracted from public blockchains (on-chain data). In this proof of concept phase, Atlas is focusing on improving data collection methodology and platform development.

While plenty of data on the industry are currently available, the data are spread over many protocols, market actors and jurisdictions, and reporting is often not regulated or standardised.

The project report details how the proof of concept uses transactions between crypto exchanges in the Bitcoin network, along with the location of those exchanges, as a proxy for cross-border capital flows. Attribution data links on-chain transactions to crypto exchanges, which are then mapped to their geographical location (where possible). The derived bilateral flows between countries are visualised on a globe that presents the data in a user-friendly and easily accessible manner. An initial analysis of preliminary data collected by the platform shows that cross-border flows are substantial economically and unevenly distributed across geographical regions.

“Project Atlas is a great example of what the BIS Innovation Hub can achieve. Working in the intersection of economics, finance and computer engineering, we are developing a new and important public good for central banks globally,” said Cecilia Skingsley, Head of the BIS Innovation Hub. “The data on cross-border flows are relevant for areas like payments and macroeconomic analysis,” she added.

Burkhard Balz, Member of the Executive Board of the Deutsche Bundesbank, points out, “Atlas enables a variety of use cases. Researchers can structurally analyse the micro data while policymakers can access tailored dashboards for insights at a glance. I am excited about the potential and future developments of this project.”

The BIS Innovation Hub develops solutions that take the form of proofs of concepts, prototypes or minimum viable products. The first proof of concept of Atlas successfully showcases how to collect, clean and analyse data relevant to central banks’ mandates. Project Atlas hence provides a starting point for holistic analysis of existing data. For example, it can help identify inconsistencies across data sources, and provides data which can be used to analyse the macroeconomic relevance of crypto markets and potential financial stability implications.

Olaf Sleijpen, Executive Board Member at De Nederlandsche Bank, adds, “Atlas leverages the diverse skills of an inter-disciplinary team including developers and economists. It is great to see what the team has accomplished. Project Atlas could be a valuable tool for the central banking community for years to come.”

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