The BoE's Digital Pound Lab is testing a trade finance flow that combines stablecoins with simulated digital pound settlement, aiming to reduce delays for SMEs.
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The Bank of England’s Digital Pound Lab is running a test that combines stablecoin payments with a simulated digital pound in a cross-border trade finance flow. The experiment involves NOBO Finance, Dun & Bradstreet and Polygon Labs, according to a Wednesday announcement from the three companies.
Under the test, an exporter receives an advance via a stablecoin rail while a UK importer completes settlement using simulated digital pounds. A separate workstream is building reusable credit profiles for small businesses by layering transaction data, open-finance information and Dun & Bradstreet’s commercial risk data on top of Polygon’s smart contract infrastructure.
The goal is to cut settlement delays and financing constraints that hit small- and medium-sized exporters. Right now an exporter can wait days for payment after shipping goods, tying up working capital. The test aims to show whether a combined stablecoin-digital pound flow can speed that up.
The Digital Pound Lab uses no real customers or real money. The Bank of England has not decided whether to issue a digital pound, and it said participant-designed experiments should not be read as policy signals or endorsements of the companies or their products.
The test comes as UK regulators write stablecoin rules while preparing the country’s financial plumbing for tokenized assets. In June the Bank of England published draft rules for sterling-denominated stablecoins that could become systemic. The proposal lets issuers hold as much as 70% of their reserves in interest-bearing government debt and sets a temporary 40-billion-pound ($52.8 billion) issuance cap for each systemic stablecoin. Those limits replace earlier proposed caps on individual and business holdings.
The central bank expects to finalise the rules by the end of 2026, with a rollout planned for 2027. Systemic stablecoins – those whose use could pose risks to UK financial stability – would fall under the Bank of England’s regime. Non-systemic stablecoins would stay under the Financial Conduct Authority.
Alongside the stablecoin work, the BoE is modernising its payment infrastructure. In May it proposed moving its Real-Time Gross Settlement (RTGS) and Clearing House Automated Payments System (CHAPS) toward near-24/7 operation, including weekends and extended daily hours, partly to support cross-border payments and new settlement models as tokenization grows.
In July the central bank approved HSBC’s Orion platform to operate in the UK’s Digital Securities Sandbox, where it is expected to support digital bond issuance, including the planned Digital Gilt Instrument.
The Digital Pound Lab test mirrors broader industry efforts to prove stablecoins can work inside regulated payment systems. Mastercard recently tested a single-audit stablecoin compliance tool with Borderless.xyz, another sign that incumbents are trying to bridge crypto rails with traditional finance.
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