The Digital Token Identifier (DTI) Foundation, a not-for-profit division of Etrading Software (ETS), welcomes Project Pyxtrial’s use of the globally recognized Digital Token Identifier (DTI) to monitor the backing of stablecoins.

 

Project Pyxtrial, a joint initiative between the Bank for International Settlements (BIS) Innovation Hub and the Bank of England, explores how technology can enable the monitoring of asset-backed stablecoins.

 

Pyxtrial employed DTIs to address the challenge of accurate monitoring of specific stablecoin tokens across multiple ledger implementations. The DTI reflects the complexity of tokens tied to the underlying DLT infrastructure and aggregates them at the asset level through the Functionally Fungible Group (FFG) DTI.

 

According to Project Pyxtrial’s recent report, using DTI offers the following benefits:

 

  • Transparency: It identifies the digital token, its location on a public or private blockchain, and its link to any underlying assets.
  • Interoperability: It is a standardised method that distinguishes between different ledgers and tokens.
  • Uniqueness: DTI is based on the digital token’s unique and verifiable origins on the distributed ledger data structure.
  • Consistency: It can distinguish original, legitimate tokens from newly created digital tokens following fork events.
  • Scalability: A unified token identifier method supports scalability and resilience to the currently fragmented cryptoasset industry

 

The report also highlighted that, beyond stablecoins, the project’s methodology could also be applied to monitor other tokenised products backed by real-world assets. The DTI will remain crucial, as the ISO standard encompasses all types of fungible tokens.

 

The DTI has been adopted by regulatory authorities, supporting the MiCA framework for stablecoin issuers and crypto-asset service providers. Key market infrastructure, such Swift, FIX and Six Digital Exchange, have also integrated the standard into their systems and messaging protocols. Project Pyxtrial’s results highlight the potential for supervisors in various jurisdictions to use the DTI for the precise assessment of stablecoin-related risks.

 

Rowan Varrall, Associate Director at DTI Foundation, comments 

“The Bank of England and the Bank for International Settlements’ decision to use DTIs to monitor the backing of stablecoins highlights the insights gained from an identifier to unambiguously define tokens across the crypto asset ecosystem. This announcement is a further example of why the DTI is fast becoming the product of choice for global regulatory authorities and crypto asset service providers”