Project Pyxtrial: monitoring the backing of stablecoins

Updated 31 July 2024

Project Pyxtrial is a joint project between the Bank for International Settlements (BIS) Innovation Hub and the Bank of England. Pyxtrial explores how technology solutions can enable the monitoring of asset-backed stablecoins' balance sheets, providing insight into whether the backing assets exceed their liabilities at all times. 

To support the supervision of issuers of asset-backed stablecoins, Project Pyxtrial has developed a prototype data analytics pipeline which includes data collection, storage and analysis. It can provide supervisors with near real time data about stablecoins' liabilities and their backing assets. Adopting Pyxtrial can support supervisors in receiving more frequent and fully automated reports. This enhances the efficiency and responsiveness of the monitoring process, which helps supervisors to respond faster to potential risks. Pyxtrial is designed so that its technical components (the APIs, integration layer, data model, data storage solution and dashboard) are modular, reusable and can be repurposed.

Pyxtrial demonstrated that the balance sheets of asset-backed stablecoins can be supervised. However, successfully deploying Pyxtrial requires that regulators use a multidisciplinary team to implement and operate it.  

Project Pyxtrial has the potential to monitor other tokenised products that are backed by real-world assets. The technology is a first step towards a tool that could support supervisors and regulators in proactively detecting issues in stablecoin backing and aid the development of policy frameworks based on integrated data.