BIS Sets Sight on New Stablecoin Project, DeFi, and Crypto Monitoring Platform

Jimmy Aki
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The Bank for International Settlements (BIS) has unveiled priorities for 2023, including launching a stablecoin project, exploring central bank digital currencies (CBDCs), and data monitoring. 

Pyxtrial: The Optimal Regulator to Build Policy Framework

On February 7, the BIS Innovation Hub announced its intention to increase its focus on CBDCs in order to improve payment systems and shape the future of financial regulation and supervision through its new project, Pyxtrial.

Pyxtrial is a versatile project launched by the London branch of the BIS Innovation Hub to secure the financial sector by enabling systematic monitoring of stablecoins. The project will create a digital version of verification processes for stablecoins, which are among the most critical and popular crypto assets in the digital currency sphere.

Stablecoins such as USD Coin (USDC) and Tether USD (USDT) are essential and contentious digital assets that underpin all cryptocurrency exchanges due to their ability to help investors instantly switch between other digital currencies and fiat currencies. 

However, the collapse and depegging of algorithmic stablecoins, notably TerraUSD, which triggered over $83 billion decentralized finance (DeFi) slump, have created doubts about fiat-backed tokens, hence the focus on regulators. 

Pyxtrial platform will integrate a unique technology that will monitor stablecoins balance sheets. The project will also investigate various technological tools that may be important to supervisors and regulators tasked with building policy frameworks based on integrated data. 

Regulatory Framework for Cryptocurrencies and Decentralised Finance (DeFi)

The BIS Innovation Hub also intends to develop more real-time tools for monitoring crypto and DeFi spaces. One of its popular projects is “Atlas,” a unique information-based platform built to provide verified data that makes it easy for investors to access the economic potentials of these markets.    

Raphael Auer, Head of BIS Innovation Hub Eurosystem Centre, said in a recent video, “while there seems to be saturated data in these digital-financial markets, it is hard to distinguish genuine information and resources from fake market capitalization and transactions.”

He further stated that the goal of the Atlas project is to create a decentralized market platform that integrates data vetting technical tools and makes information statistics freely available to traders and investors.

BIS Innovation Vast Projects So Far

The Bank for International Settlements (BIS) was created in 2019 with one goal – to facilitate exploratory work into new frontiers in the digital-financial technology sphere. The BIS Innovation Hub has grown exponentially, expanding across several world regions, including North America, Asia, and Europe. 

Although the Hub mapped out its plans for 2023, which entails experimenting with Central Bank Digital Currencies (CBDCs) to shape the future of digital currencies, it has created over 21 active and five concluded utility projects. 

Fifteen of these projects are entwined on CBDCs, while three cross-border CBDCs projects have concluded, including Jura, Dunbar, and Project Helvetia. However, MBridge still takes center stage as the main project, exploring wholesale cross-border payments solutions.

MBridge, short for Multiple CBDC Bridge, debuted in September 2022. The Central Banks of Thailand, China, Hong Kong, the United Arab Emirates, and over 20+ commercial banks in different countries utilized MBridge cross-border payment solutions. 

Polaris and Titus are two CBDC active projects that are significant but have relatively gone under the radar. Titus was launched in 2022 to test blockchain solutions and liquidity-saving mechanisms, which are integral in using decentralized finances (DeFi), but more information is required.

Project Mariana is another notable DeFi solution in the works, designed to automate the foreign exchange market. While Atlas monitors cryptocurrency systems and blockchain DeFi, Project Genesis was used in testing bond trials.

In essence, these projects’ emphasis reflects BIS Innovation Hub’s interest in further improving payment methods across border systems. 

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.