The Bank of England and the BIS Innovation Hub have developed a system that gives supervisors near real time data about stablecoins' liabilities and their reserve assets.
Stablecoins are a fast-growing but still largely unregulated sector with a market capitalisation of around $162 billion.
Last year, the BIS Innovation Hub in London and the BofE embarked on Project Pyxtrial to explore how technology can help regulators monitor asset-backed stablecoins' balance sheets, providing insight into whether the backing assets exceed their liabilities at all times.
The partners now say they have developed a prototype data analytics pipeline which includes data collection, storage and analysis. This can provide supervisors with near real time data about stablecoins' liabilities and their backing assets.
Adopting Pyxtrial can support supervisors in receiving more frequent and fully automated reports, boosting the efficiency and responsiveness of the monitoring process, says the BIS.
The system is designed so that its technical components - the APIs, integration layer, data model, data storage solution and dashboard - are modular, reusable and can be repurposed. As such, it could be used to monitor other tokenised products that are backed by real-world assets.