BIS has created a system to oversee international cryptocurrency transfers.
This data will be shared with authorities to gain a better understanding of the cryptocurrency market, potentially laying the foundation for future regulations
This system aims to provide authorities with detailed insights into the usage patterns of cryptocurrency, including when, where, and how it is being utilized. BIS is collaborating on this project with the central banks of two countries, namely De Nederlandsche Bank and Deutsche Bundesbank. The development of this system began over five years ago at the BIS Innovation Hub.
The developers designed a prototype platform capable of gathering data from both publicly available cryptocurrency blockchains and more restricted data sources, such as information transmitted by certain cryptocurrency exchanges. This data offers a broad overview of cryptocurrency activity. The BIS prototype generates dashboards that display the conversion of bitcoins into dollars at specific times and in particular regions worldwide. It also provides insights into the prevalence of cryptocurrency and the relative size of the market. The flow of cryptocurrencies across borders holds particular importance for central banks in the context of international payments, economic analysis, and balance of payments statistics, as stated by the BIS.
This new monitoring system could serve as the groundwork for regulating the cryptocurrency sphere. In a statement, the BIS expressed the need for central banks to have direct access to data regarding cryptocurrencies and the decentralized finance (DeFi) sector, along with an understanding of the risks and opportunities they present to the financial system. Established in 1930, the BIS functions as a "bank of central banks." According to a program released by the Bank for International Settlements, its focus in 2023 includes projects related to central bank digital currencies (CBDCs), the regulation of digital asset markets, and the development of tools for market surveillance. In addition to its work on cryptocurrency monitoring, the bank has also announced a separate monitoring system for stablecoins under Project Pyxtrial, which will be launched by the London-based
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