ECB Says It Plans to Use More On-Chain Data to Monitor Crypto Assets

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The European Central Bank (ECB) has issued a new report indicating that it plans to use more on-chain data to better monitor the crypto markets.Titled “Understanding the crypto-asset phenomenon, its risks and measurement issues,” the report reveals that the ECB has already built a system that uses “high-quality” aggregated data available online in its efforts to analyse “the crypto-asset phenomenon” to identify and monitor how the financial technology might affect monetary policy and the risks it potentially poses to market infrastructures, payments and financial stability.However, using available data in this way has limits to its value. The report explains that this data leaves “gaps and challenges,” such as the exposure of financial institutions to crypto-assets and payment services that use layered protocols.It lists, among others, derivatives and investment vehicles’ exposure to digital assets, financial firms moving into custody and other services, and payments platforms using cryptos as potentially having implications…

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