Crypto and DeFi: Europe Soon Under Strict Surveillance?

Thu 05 Oct 2023 ▪ 4 min of reading ▪ by Mikaia A.
Getting informed Crypto regulation

No cryptocurrency transaction should go unnoticed by the Bank for International Settlements (BIS), as they develop a suitable system to track cryptocurrency exchange flows throughout the European territory. Several European central banks have joined them in this initiative. Let’s take a closer look!

EU and BIS logos, photo of binoculars, cryptocurrency coins and euro bills

Tracking All Crypto Transactions in Europe

Cryptocurrencies have disrupted, continue to disrupt, and will likely keep challenging central banks. If some of them are speeding up the development of MNBCs (or CBDCs in English), don’t be surprised. It’s through these central bank digital currencies that these institutions believe they can slow down the progress of Bitcoin, Ethereum, Dogecoin, and other cryptocurrencies.

The BIS, like the U.S. Federal Reserve, is currently working on a massive wholesale MNBC project. France, Switzerland, and Singapore have joined this initiative called “Mariana.”

To demonstrate that they won’t give crypto assets a free pass, the Bank for International Settlements has also enlisted the support of other European central banks to develop a project for monitoring digital asset transactions. With the backing of the European Central Bank, the Bank of France, the Deutsche Bundesbank, and the Nederlandsche Bank, the BIS has established a platform for tracking cryptocurrency and DeFi flows, according to Cointelegraph.

This platform will trace all on-chain and off-chain transactions of cryptocurrencies on designated exchanges. Even cryptocurrency exchanges on public blockchains will not escape this system based on the Proof-of-Concept (PoC) mechanism. The same goes for cross-border flows, which have recently become a specialty of Ripple.

The primary goal of the BIS with the “Atlas” project is to evaluate the macroeconomic relevance of cryptocurrency markets and DeFi protocols.

“The data will enable us to analyze flows in a structural manner and to study the influence of price shocks, financial market developments, and country characteristics on cryptocurrency flows,” explained a BIS spokesperson.

Atlas: Pursuit of Transparency or Central Bank Interference?

Data published by BIS Innovation Hub shows that the crypto industry:

  • Lacks transparency.
  • Poses potential risks to financial stability (given the collapses of Terra and FTX).

However, the first feasibility demonstration of Atlas was successful. The image below highlights on-chain and off-chain data from public blockchains like Bitcoin (BTC) and crypto exchanges within the reach of the BIS. Thanks to nodes, this banking institution can even collect cryptocurrency flows from any geographic location.

Demonstrating the effectiveness of the Atlas application
Demonstrating the effectiveness of the Atlas application

Atlas has yet to provide details about the location of crypto exchanges. The BIS technicians will likely address this aspect in the near future.

Their methodology also leads them to select flows that are somewhat smaller than actual cryptocurrency transaction volumes. At its current stage, the Atlas interface already features functional dashboards providing access to:

  • Data aggregation and analysis results.
  • On-chain crypto transfer data.
  • Figures related to international fund movements.

For the future, the BIS has promised to enhance Atlas by integrating other data sources and collecting data from Ethereum nodes and other DeFi protocols. It seems central banks, proud of their CBDCs, have an affinity for “totalitarianism.”

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Mikaia A. avatar
Mikaia A.

La révolution blockchain et crypto est en marche ! Et le jour où les impacts se feront ressentir sur l’économie la plus vulnérable de ce Monde, contre toute espérance, je dirai que j’y étais pour quelque chose


The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.