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Joint Research Centre

CIPHER: Monitoring crypto markets

CIPHER is an analytical platform that monitors blockchain activity and emerging risks stemming from the rapidly expanding crypto markets, helping policymakers to protect EU financial system and boosting its strategic autonomy.

In recent years, crypto markets have grown rapidly, reaching several trillion dollars in market capitalisation. At the same time, they are becoming increasingly intertwined with the traditional financial system. 

As these links deepen, shocks originating in crypto markets could potentially spill over into the wider financial system.

To better understand these developments, scientists at the European Commission’s Joint Research Centre (JRC) have developed CIPHER, a dashboard platform designed to track crypto-asset markets and detect emerging risks in digital finance

This infographic presents key indicators of the global crypto-asset market. In 2023, daily trading volume exceeded 170 billion US dollars. Market capitalization is estimated to approach 4 trillion US dollars by 2025. A stacked bar chart shows a substantial increase in total market value between 2022 and 2025, with Bitcoin representing the largest share. A line chart indicates that the number of crypto-asset users may reach approximately 750 million by 2025. The visual highlights the rapid growth in market s

The CIPHER platform

Crypto ecosystems generate vast amounts of blockchain data, making it difficult for regulators and policymakers to follow market developments and identify potential vulnerabilities. CIPHER addresses this challenge by analysing blockchain data and providing real-time insights into market activity, structural dependencies and evolving risk patterns.

By translating complex blockchain information into accessible analytics, the platform aims to become an operational analytical capability for policymakers and supervisors assessing risks in digital finance.

The image presents a time-series chart from the Cipher monitoring dashboard. The image shows the CIPHER real-time detection of the Silicon Valley Bank failure in March 2023, illustrating USDT compound lending protocol activity during the Silicon Valley Bank failure.
Example from the CIPHER dashboard showing how the platform detected in real time market reactions during the Silicon Valley Bank failure.

Key channels through which crypto risks can spread

Crypto-assets and decentralised finance (DeFi) are evolving rapidly, creating new channels through which disturbances could affect financial markets.

  • Stablecoins, digital tokens designed to maintain a stable value, are increasingly backed by traditional financial assets such as government bonds.
  • Financial institutions such as banks, hedge funds and asset managers are becoming more active participants in crypto markets.

These developments create potential pathways through which stress originating in crypto markets could transmit more broadly across the financial system.

Supporting EU policy

By combining blockchain data with analytical tools, the CIPHER platform can:

✔ monitor market activity and liquidity flows
✔ detect systemic dependencies within crypto markets
✔ analyse interactions between crypto markets and traditional financial actors
✔ support financial stability assessments
✔ explore potential stress scenarios for decentralised financial systems

The framework can support stress-testing simulations and help model how shocks — such as the failure of a major stablecoin or DeFi protocol — might propagate across markets.

In the European Union, the Markets in Crypto-Assets (MiCA) Regulation establishes a comprehensive framework for crypto-asset markets. However, decentralised technologies and cross-border digital finance continue to create new supervisory challenges.

By providing real-time insights into blockchain activity, CIPHER strengthens the evidence base needed for informed policy and regulatory decisions that support financial stability and EU strategic autonomy.

More information 

CIPHER quick overview - Leaflet

CIPHER framework - Report

Contact

Would you like to add CIPHER to your workflow? 

Get in touch with our team: JRC-EU-CIPHERatec [dot] europa [dot] eu (JRC-EU-CIPHER[at]ec[dot]europa[dot]eu)