The Bank for International Settlements (BIS) has announced a joint project with the Bank of England aimed at tracking stablecoins’ reserves. This initiative, known as Project Pyxtrial, aims to supervise the assets backing stablecoins, providing supervisors with near real-time data about these digital currencies’ liabilities and their backing assets.

Project Pyxtrial focuses on leveraging technology for data collection, storage, and analysis, addressing potential risks more swiftly. The project supports APIs, enabling different parties to connect and share data efficiently. According to the BIS, the balance sheets of asset-backed stablecoins can now be supervised, although successful deployment will require regulators to use a multidisciplinary team to implement and operate the project.

“The balance sheets of asset-backed stablecoins can be supervised,” the BIS stated.

Project Pyxtrial also has the potential to extend beyond stablecoins, allowing the monitoring of other tokenized products backed by real-world assets. This could help regulators proactively detect issues in stablecoin backing and aid the development of policy frameworks based on integrated data.

The scrutiny of stablecoin reserves has been a persistent issue within the cryptocurrency industry. Europe’s regulatory framework for digital assets, the Market in Crypto-Assets (MiCA), was anticipated to clarify these concerns by imposing stringent transparency, compliance, and reserve requirements on issuers before offering stablecoins to consumers in the European Union.

However, not all industry stakeholders are satisfied. Tether (USDT) chief executive Paolo Ardoino recently expressed concerns that MiCA regulations on stablecoins, particularly the excessive cash reserve requirements, could pose systemic risks to banks.

For more updates on the latest developments in the cryptocurrency world, stay tuned to Global Crypto News.

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