BIS, Bank of England Launch Stablecoin Monitoring Tool

IconCryptoNewsTerminal Staff31 Jul, 2024

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BIS, Bank of England Launch Stablecoin Monitoring Tool

The Bank for International Settlements (BIS) and the Bank of England have joined forces to develop a tool for monitoring the balance sheets of stablecoins, potentially aiding regulators in identifying potential risks and informing policy frameworks. Dubbed Pyxtrial, the project was initially launched in February 2022 and is designed to address concerns surrounding the potential for "stablecoin runs," which could occur if there is a mismatch between a stablecoin issuer's liabilities (the stablecoins issued) and its reserves. By providing regulators with a means to monitor these balance sheets, Pyxtrial could facilitate early detection of any potential problems. The report published by the BIS and Bank of England emphasizes the importance of stablecoin monitoring, stating that "a stablecoin run could have systemic consequences if it led to a loss of confidence in other stablecoins or in the financial system more generally." The development of Pyxtrial represents a significant step towards addressing these concerns and enhancing the stability of the financial system.

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