BIS, Bank of England unveil Project Pyxtrial for stablecoin monitoring

The Bank for International Settlements (BIS) and Bank of England have released the results of their Project Pyxtrial to monitor the reserves of asset-backed stablecoins and tokenized assets. Pyxtrial is described as a proof-of-concept and an “important first step.”

The system is not entirely ready for launch and, as its creators noted, the world isn’t ready for it either, as the regulations it would help enforce are largely still being formulated.

Merging two data flows

The solution is made up of a data model, database and application programming interfaces (APIs). Processed data would be available to regulators and supervisors through a customizable dashboard. The system is not completely automated:

Pyxtrial is designed to gather data hourly from blockchains and platforms that host stablecoins. That data is then matched with data from issuers about the stablecoins’ backing assets. The self-declared data received from issuers could be insufficient in several ways. The Pyxtrial user needs the enforcement authority to specify the data that must be submitted and, crucially, the frequency of submitting it.