The proof-of-concept demonstrated that the collaboration of regulators, technologists, and issuers could result in the real-time monitoring of stablecoin reserves.
The results of Project Pyxtrial, which was conducted by the Bank for International Settlements (BIS) and the Bank of England to monitor the reserves of asset-backed stablecoins and tokenized assets, have been disclosed. Pyxtrial is characterized as a “significant initial step” and a “proof-of-concept.”
The system is not yet fully prepared for launch, and as its creators have observed, the world is not yet prepared for it either, as the regulations it would assist in enforcing are still in the developmental stages.
Pyxtrial facilitates the collection of data from blockchains and platforms that host stablecoins on an hourly basis. The data is subsequently compared to information from issuers regarding the stablecoins’ underlying assets. Issuers’ self-declared data may be lacking in many aspects. The Pyxtrial user requires the enforcement authority to specify the data that must be submitted and, more importantly, the frequency of submission.
Project Atlas operates in a similar manner, collecting onchain data from cryptocurrency exchanges and public blockchains, as well as offchain data, and subsequently processing it to meet the requirements of central banks.
It would be difficult to train users. As the report authors have noted, operators will require a comprehensive understanding of blockchain technology and regulations. Conversely, Pyxtrial could be effortlessly modified to oversee additional digital assets, including tokenized securities or bonds. The authors composed the following:
“Pyxtrial is created with the intention that its technical components are modular, reusable, and capable of being repurposed.” It is designed to be flexible enough to be improved in the future, while also being able to be integrated into existing systems and adapted to specific regulatory requirements.
The report also stated that the proof-of-concept demonstrates the potential for regulators and technologists to collaborate.
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