BIS and Bank of England plan to monitor stablecoin balance sheets

The Bank for International Settlements (BIS) and the Bank of England (BoE) have been able to prove that the balance sheet of asset-backed stablecoins can be regulated. These organizations stated on Wednesday that the Pyxtrial project has developed a prototype data analysis pipeline that can provide regulators with near real-time data on stablecoin liabilities and their supporting assets. The report stated: "This technology is the first step towards supporting regulatory agencies in proactively discovering stablecoin support issues and helping to formulate policy frameworks based on comprehensive data." The report also stated: "If there is a mismatch between the liabilities (currency in circulation) of the stablecoin issuer and the assets supporting the stablecoin, it may weaken people's confidence in the issuer's ability to provide redemption at face value and trigger a 'run', that is, a sudden loss of confidence in the value of the stablecoin." The Bank for International Settlements also stated that the Pyxtrial project has the potential to monitor tokenized products supported by real-world assets.