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Phase 2 trade finance test
The Bank of England’s Digital Pound Lab entered Phase 2 to test how public stablecoins and central bank money can operate together in a single payment flow for trade finance, with NOBO Finance, Dun & Bradstreet and Polygon Labs named as participants.
“By moving its digital pound exploration into Phase 2, the BOE is testing whether public stablecoin infrastructure and central bank money can coexist”
In the experiment, an exporter would receive an advance through stablecoin technology while a U.K. importer makes final settlement in digital pounds, and the lab uses no real customers or money.
CoinDesk said the work is intended to inform the BOE and the Treasury’s assessment of how different forms of digital money can interoperate, and it does not signal any decision to issue a digital pound.
The project also includes a workstream to build an SME “bankable profile,” combining wallet transaction data, open-finance information and business intelligence to create a reusable credit assessment.
Polygon Labs CEO Marc Boiron said, “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,” as the consortium tested the same flow.
Identity, consent, and factoring
A second workstream in Phase 2 tests invoice factoring backed by an electronic bill of lading, with exporters receiving stablecoin advances while U.K. importers complete final settlement in digital pounds.
CoinDesk said Polygon will provide smart contracts intended to record the verified outcome and manage consent, while the consortium plans to experiment with invoice factoring backed by electronic bills of lading.
Crypto.news described the same Phase 2 structure as two connected workstreams, with Polygon providing stablecoin settlement, wallet and smart contract infrastructure through its Open Money Stack.
Dun & Bradstreet’s Sara de la Torre said, “Smoother trade finance for SMEs depends on trust,” and linked that trust to reliable business identity and risk information.
Crypto.news also emphasized that the Digital Pound Lab uses no real customers or money and “does not mean the Bank of England has decided to issue a digital pound.”
Regulatory context and next steps
The Phase 2 trials are framed as part of the Bank of England’s broader work on digital currencies and next-generation payment systems, with CoinDesk saying the findings will feed into the BOE and the Treasury’s joint assessment of the digital pound ahead of its next steps later this year.
“The Digital Pound Lab uses no real customers or money”
CoinDesk reported that the BOE has been experimenting with a central bank digital currency since 2024 and is testing how stablecoins and a digital pound can work together as central banks globally grapple with how the two payment mechanisms interact.
TradingView added that the lab’s experiment uses simulated digital pounds and “The Digital Pound Lab uses no real customers or money,” while also noting the Bank of England has not committed to issuing a digital pound.
TradingView tied the Digital Pound Lab to parallel regulatory efforts, saying in June the Bank of England published draft rules for sterling-denominated stablecoins considered systemic to the U.K. financial system, including a temporary 40-billion-pound ($52.8 billion) issuance cap.
Cointelegraph likewise described the lab as testing whether stablecoins and a potential digital British pound can operate within the same cross-border payment flow, and it said the central bank has stated participant-designed experiments “should not be interpreted as indications of future bank policy.”
