The Bank of England and the BIS Innovation Hub have developed a system that provides supervisors with near real-time data regarding the liabilities of stablecoins and their reserve assets.
Stablecoins represent a rapidly expanding yet predominantly unregulated sector, with a market capitalization of approximately $162 billion. Last year, the BIS Innovation Hub in London and the Bank of England initiated Project Pyxtrial to investigate how technology could assist regulators in monitoring the balance sheets of asset-backed stablecoins. This project aims to ensure that the backing assets consistently exceed their liabilities.
The partners have now created a prototype data analytics pipeline that encompasses data collection, storage, and analysis. This system enables supervisors to access near real-time information about stablecoins’ liabilities and their supporting assets. According to the BIS, implementing Pyxtrial can enhance the frequency and automation of reporting, thereby improving the efficiency and responsiveness of the monitoring process.
The design of the system incorporates modular, reusable technical components, including APIs, integration layers, data models, data storage solutions, and dashboards. This modularity allows for potential applications beyond stablecoins, enabling monitoring of other tokenized products backed by real-world assets.