Project Pyxtrial: monitoring stablecoins

Project Pyxtrial is the latest project from the BIS Innovation Hub London Centre that is exploring technology solutions to enable the monitoring of balance sheets of asset-backed stablecoins.

Asset-backed stablecoins are using traditional financial assets as their backing and are vulnerable to run risks. A mismatch between liabilities (coins in circulation) and assets backing those coins would undermine confidence in the ability of a stablecoin issuer to offer redemption at par and prompt such a run. This could create risks to financial stability if the stablecoin issuer is systemic or there is contagion to other stablecoins.

Pyxtrial aims to develop a prototype data-analytic pipeline, including data collection, storage, and analytics, to investigate possible asset-liability mismatches. The technology could be used to help supervisors and regulators build policy frameworks based on integrated data.