BIS test lab develops bitcoin monitor system

BIS test lab develops bitcoin monitor system

LONDON - A global central bank test lab has developed a prototype bitcoin monitor system to give authorities a clearer picture on how, when and where the cryptocurrency is used.

The Bank for International Settlements project, codenamed Atlas, began in the Dutch central bank several years ago, but its potential value has been highlighted by a series of chaotic collapses in the crypto industry over the last 18 months.

Atlas created a'Proof of concept' platform that sucks data from both publicly available 'on-chain' crypto ledgers as well as harder to obtain from off-chain data reported by only some exchanges and users.

The US government has filed a civil suit against Coinbase and Binance, with the aim of cracking down on cryptocurrencies.

Although crypto wallets can be set up anonymously and without the owner's knowledge, it is not always accurate.

The BIS said it acknowledges uncertainty, albeit acknowledging the 'uncertainty'.

The decentralised nature of cryptocurrencies has become a worrying issue for regulators, particularly after the collapse of a widely-used stablecoin pair, Luna and TerraUSD and the FTX plaform last year.

The BIS' 'innovation hub' prototype uses 'dashboards' that show how many bitcoins are being converted into US dollars at certain times in certain regions of the world.

They can also provide an insight into the adoption and significance of crypto markets as they rise or decrease in popularity.

The BIS said that trans-border crypto flows are particularly relevant for central banks in the context of cross-border payments, economic analysis and balance of payments statistics.

Crypto firms use 'backdoor' listing to ease into the mainstream.

Some countries may have limited access to cross-border transfers due to the current gaps in data.

The dashboards have now been made available to a group of 'test' central banks to gather feedback and for further development.