The Bank of England (BoE) will test whether stablecoins and a digital pound (CBDC) can operate within a single cross border payment flow.
The BoE is launching the second phase of testing for a potential CBDC. According to CoinDesk, the new stage of the Digital Pound Lab will examine whether public stablecoins and a potential CBDC can be used within the same payment process for international trade finance.
The Digital Pound Lab is the Bank of England’s experimental platform, launched in 2025 as part of the digital pound design phase with participation from financial institutions and technology companies. The initiative allows banks, FinTech firms, and technology developers to test various payment solutions and business models in a controlled environment.
The second phase of the Digital Pound Lab includes:
- U.K. FinTech company NOBO Finance, which develops digital trade finance infrastructure for small and medium sized businesses;
- global provider of data, analytics, and commercial credit risk assessment services Dun & Bradstreet;
- blockchain infrastructure developer Polygon Labs, which provides smart contract functionality and stablecoin settlement infrastructure through the Open Money Stack platform.
As part of the project, the companies will test two key areas under the Bank of England’s supervision:
- Developing a digital credit profile (SME Bankable Profile) for small and medium sized businesses. Under this scenario, NOBO Finance, Dun & Bradstreet, and Polygon Labs will combine crypto wallet data, open finance information, and commercial analytics to create a portable assessment of a company’s creditworthiness. Polygon’s smart contracts will record verification results and manage consent for data usage.
- Testing invoice factoring for cross border trade using electronic bills of lading. Under the proposed model, exporters will receive advance financing in stablecoins, while U.K. importers will complete final settlement in digital pounds. Polygon Labs will provide the stablecoin settlement infrastructure, including fiat currency conversion, wallets, and smart contracts.
The experiments will take place in a testing environment without real customers or live funds. The findings will help the Bank of England and HM Treasury assess the feasibility of issuing a CBDC and developing the supporting payment infrastructure.
The digital pound pilot successfully completed its proof of concept phase in 2023, and U.K. authorities planned to decide on issuing a CBDC in 2025. However, no final decision was made, and the Digital Pound Lab initiative was launched instead.
