BOE Tests Stablecoin and Digital Pound in Same Trade Payment

The Bank of England is moving its digital pound exploration into a second phase that tests whether stablecoins and a potential central bank digital currency can settle trade payments together. The experiment will simulate a single cross-border flow where an exporter receives stablecoin-based financing while a UK importer pays in digital pounds.

No real customers or funds are involved. The work remains experimental. The choice to test both types of money in the same transaction signals a shift toward interoperability rather than treating each system as a silo.

The Digital Pound Lab is running the project with NOBO Finance, Dun & Bradstreet and Polygon Labs across two connected workstreams. One will build a reusable credit profile for small- and medium-sized exporters by layering wallet transaction data, open-finance feeds and business intelligence. Polygon is providing smart contracts to record verified outcomes and manage consent. The second workstream tests invoice factoring underpinned by electronic bills of lading. Polygon's Open Money Stack handles stablecoin settlement, fiat-to-stablecoin conversion, wallets and smart contracts.

Phase 1 had already explored conditional escrow payments between businesses. Phase 2 extends the scope to ask whether different forms of digital money can share a single settlement process without locking companies into one provider or one currency type.

The exposure here is layered. For stablecoin issuers and their infrastructure partners, the BOE's willingness to test private money alongside a CBDC is a validation of the asset class for wholesale payments, provided the technology works. For smaller UK exporters, the promise is faster working capital release. The risk is that the experiment shows fragmentation between rails, delaying any real-world rollout.