- The Bank of England's Digital Pound Lab Phase 2 tests stablecoin and digital pound interoperability in cross-border trade finance.
- NOBO Finance, Dun & Bradstreet and Polygon Labs are building an SME 'bankable profile' using wallet data, open finance and business intelligence.
- A second workstream tests invoice factoring with electronic bills of lading, where exporters get stablecoin advances and U.K. importers settle in digital pounds.
- The experiment uses no real money and does not mean the Bank of England will issue a digital pound.
The Bank of England has moved its Digital Pound Lab into a second phase, this time looking at how a stablecoin and a simulated digital pound could share the same cross-border trade finance payment flow. The project brings together NOBO Finance, Dun & Bradstreet and Polygon Labs, and the results are meant to inform the central bank and the Treasury as they weigh whether a digital pound is actually needed.
The lab is a controlled environment, so no real customers or money are involved. Instead, participants build and test prototypes using simulated infrastructure. The latest experiment focuses on small and medium-sized enterprises (SMEs) and the friction they often face in international trade, from slow settlement times to limited access to credit. The idea is to show how different forms of digital money could be combined to make the process smoother.
Digital Pound Lab Phase 2: A trade finance experiment
The experiment is built around two main workstreams. One is a ‘bankable profile’ for SMEs, which would combine consented wallet transaction data, open-finance information and business intelligence from Dun & Bradstreet to produce a reusable credit assessment. Polygon Labs will handle the smart-contract layer, recording verified outcomes and managing consent.
The other workstream is invoice factoring backed by electronic bills of lading (eBL). In this scenario, an exporter receives an advance through stablecoin technology, while a U.K. importer makes the final payment in digital pounds. This is a direct test of how a single transaction can move between private and public digital money without forcing the user to choose one over the other.
NOBO Finance was already part of Phase 1, where it demonstrated conditional escrow payments between businesses, a key part of trade finance workflows. Its CEO, Ayo Ojerinola, has said that smoother trade finance for SMEs depends on trust, and that starts with reliable business identity and risk data. That’s where Dun & Bradstreet’s commercial graph comes in.
Two workstreams: bankable profiles and invoice factoring
The bankable profile is meant to reduce the time it takes for SMEs to prove their creditworthiness. Instead of repeating the same verification process with every lender, a company could carry a portable financial identity backed by verified data. That would lower the cost of credit assessments and open the door to more financing options for smaller businesses.
The factoring experiment, meanwhile, targets the liquidity gap exporters face while waiting for payment. With an eBL as collateral, an exporter can get an advance in stablecoins, and the final settlement in digital pounds happens once the importer pays. This could cut down the days-long wait that often ties up working capital.
Marc Boiron, CEO of Polygon Labs, put it this way: “For digital money to actually move the world’s trade, its different forms have to work together — public and private, central bank money and stablecoins. This experiment tests exactly that.” Polygon is providing its Open Money Stack, which includes fiat-to-stablecoin conversion, wallets and smart contracts.
Regulatory backdrop and next steps
The Digital Pound Lab is not happening in isolation. The Bank of England has been working on rules for systemic sterling stablecoins and a broader overhaul of payment infrastructure. In June, it published draft rules for stablecoins considered systemic to the U.K. financial system. Those rules would allow issuers to hold up to 70% of their reserves in interest-bearing government debt and would cap each systemic stablecoin’s issuance at £40 billion ($52.8 billion) on a temporary basis.
The central bank expects to finalize those rules by the end of 2026, with a possible launch in 2027. Systemic stablecoins would fall under the Bank of England’s regulation, while non-systemic ones would stay with the Financial Conduct Authority. The lab’s findings will feed into the Bank and Treasury’s joint assessment of the digital pound, which is scheduled for later this year.
There are also broader changes in the works. In May, the Bank of England proposed moving its real-time gross settlement system (RTGS) and CHAPS to near 24/7 operation, including weekends and extended hours. That would support cross-border payments and new settlement models as tokenization advances. In July, the central bank approved HSBC’s Orion platform for the U.K. digital securities sandbox, where it will help issue digital bonds, including the planned Digital Gilt Instrument.
Despite all this activity, the Bank of England has made it clear that no decision has been made on issuing a digital pound. The experiments are not a sign of future policy and do not endorse any specific company or product. The lab uses simulated digital pounds, not real money, and the results are just one input into a much larger conversation.
All of this points to a future where digital money might not be a single, dominant format but rather a set of interoperable pieces. For SMEs, that could mean faster settlements, lower costs and better access to trade finance. For regulators, it means figuring out how to keep the system stable while allowing innovation to happen. The next few months will determine whether the Digital Pound Lab’s Phase 2 findings help move that vision closer to reality.
