BIS designs bitcoin monitor

  • October 5, 2023
  • Posted by: OptimizeIAS Team
  • Category: DPN Topics
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BIS designs bitcoin monitor

Subject : Economy

Section: Monetary Policy

In News: BIS has come up with a Bitcoin monitoring system aimed at giving authorities a clearer picture on how, when and where the cryptocurrency is used.

Key Points:

  • Bank for International Settlements (BIS) project, codenamed Atlas, began at the Dutch central bank more than five years ago.
  •  Atlas created a “proof of concept” platform that sucks data from both publicly availa-ble “on-chain” crypto ledger as well as harder to source “off-chain” data reported by onlysome exchanges and users.
  • That information then provides a rough picture of cryp-tocurrency activity, although as crypto wallets can be set up anonymously and without the owner specifying location, it is not necessarily precise.
  • An initial analysis of data collected by the platform indi-cates that cross-border flows are substantial in economic terms and unevenly distributed across geographical Regions
  • BIS’ ‘innovation hub prototype produces “dash-boards” that show information such as how many bitcoin are being converted into US dollars at certain times in certain parts of the world.
  • They can also provide an insight into the adoption and relative importance of crypto markets as they rise or fall in popularity.
  • Cross-border crypto flows are particularly relevant for central banks in the context of cross-border payments, economic analysis and balance of payments statistics, the BIS said.
  • They may represent a sig-nificant part of cross-border transfers for some countries that is hard to quantify because of the current gaps in data.
  • Central banks need to gain first-hand knowledge of crypto and DeFi and the risks and opportunities they present to the financial system
Bank for International Settlements

  • The Bank for International Settlements is an international financial institution which is owned by member central banks. Its primary goal is to foster international monetary and financial cooperation while serving as a bank for central banks.
  • As the bankers’ bank, the BIS serves the financial needs of member central banks. It provides gold and foreign exchange transactions for them and holds central bank reserves.
  • The BIS is also a banker and fund manager for other international financial institutions.
BIS designs bitcoin monitor economy