The BIS and the Bank of England plan to regulate stablecoin balance sheets

The Bank for International Settlements (BIS) and the Bank of England (BoE) have been able to demonstrate that the balance sheets of asset-referenced stablecoins can be regulated, according to a new project report published on Wednesday. The Pyxtrial project has developed a prototype data analytics pipeline that can provide regulators with near real-time data on stablecoin liabilities and the assets they support, the organizations said on Wednesday. "This technology is a first step towards supporting tools for regulators to proactively identify stablecoin support issues and help develop policy frameworks based on comprehensive data," the report said.
"If there is a mismatch between the liabilities of a stablecoin issuer (the currency in circulation) and the assets backing the stablecoin, this could undermine confidence in the issuer's ability to offer redemptions at par and trigger a'run ', or sudden loss of confidence in the value of a stablecoin," the report said. The BIS said the Pyxtrial project also had the potential to monitor tokenised products backed by real-world assets.