Bank for International Settlements announces new stablecoin monitoring project

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The Bank for International Settlements has announced that it will be giving more attention to the testing of central bank digital currencies (CBDCs) this year through its research and development branch. Additionally, the BIS will be starting a new project to keep track of stablecoins. 

The Switzerland-based organisation, known as the "bank for central banks," stated that its Innovation Hub would concentrate more on CBDCs in 2023 to advance payment systems.

The bank mentioned that its plans for the upcoming year include a new project called "Project Pyxtrial," which will be initiated by the London branch of the BIS Innovation Hub.

Project Pyxtrial aims to create a system for monitoring the financial records of stablecoins.

The bank pointed out that many central banks do not have the means to observe stablecoins and prevent discrepancies between assets and liabilities. The project will examine different technological methods that could aid supervisors and regulators in constructing policy frameworks using comprehensive data.

For its central bank digital currency initiatives, the BIS will concentrate more on retail-focused CBDCs, such as the two-layered system named Aurum that was tested in Hong Kong in July. 

The bank reported that of the 26 projects it has been working on in recent years, 15 have been related to CBDCs and enhancing payment systems. The main reason for this emphasis is the growing interest among central banks. 

The BIS stated that this focus aligns with the interests and objectives of central banks and the G20 countries' efforts to enhance cross-border payments.

The BIS also intends to test the distribution of a retail central bank digital currency through an open API ecosystem in a joint experiment with the Bank of England known as Rosalind.

In September, the BIS completed a trial for a platform named mBridge, which stands for Multiple CBDC Bridge. The central banks of Hong Kong, Thailand, China, and the United Arab Emirates participated in the pilot, along with 20 commercial banks from these countries.

According to the CBDC tracker by the Atlantic Council, only 11 countries have fully introduced a central bank digital currency. All of them are located in the Caribbean region, with the exception of Nigeria. 

Currently, there are pilot projects underway in 17 nations, predominantly in Asia, such as China, Russia, Kazakhstan, India, South Korea, Thailand, and Malaysia.

Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash