Digital Pound Trade Test
Bank of England, Polygon Advance Digital Pound Tests for SME Cross-Border Trade
Key Points
NOBO Finance will coordinate the trade finance protocol, Polygon Labs will manage the core blockchain technology, and Dun & Bradstreet will provide business verification and risk intelligence services in Phase 2.
A cross-border settlement test showed one leg moving in stablecoins and the other settling in a simulated digital pound, with an exporter on stablecoins and a UK importer settling on the digital pound; both legs cleared through a single orchestrated flow.
The Bank set a temporary £40 billion issuance guardrail for systemic sterling stablecoins and requires issuers to hold at least 30% of backing assets in central bank deposits as part of its current policy.
The SME Bankable Profile on-chain rails anchor business identities with Dun & Bradstreet data, enabling on-chain travel of credit profiles with payments in the settlement flow.
The Bank of England has launched Phase 2 of its Digital Pound Labs program, testing whether private stablecoins and central bank digital money can handle different legs of the same trade transaction, according to Coin Law. The expanded effort brings together Polygon Labs for blockchain infrastructure, NOBO Finance for trade finance coordination, and Dun & Bradstreet for business verification and risk data.
A settlement test inside the lab showed a cross-border flow where an exporter received stablecoins while a UK importer settled in a simulated digital pound — both legs clearing through a single process, Coindoo reported. The Bank stresses that Digital Pound Labs is a pre-decision sandbox, not a launch plan.
How the Two-Currency Settlement Test Actually Worked
The cross-border test split one transaction into two distinct legs. An exporter on the stablecoin side got paid in private digital currency. A UK importer on the other side settled in a simulated digital pound. Both legs cleared together through one orchestrated flow, according to Coin Law.
This dual-currency design is the core idea the Bank wants to stress-test. Private stablecoins handle the commercial leg. Central bank money handles the settlement leg. The Bank wants to see if the two can work together without breaking down, Coindoo reported.
What Polygon, NOBO, and Dun & Bradstreet Each Bring
Polygon Labs manages the core blockchain technology. NOBO Finance runs the trade finance protocol that coordinates the flow of payments. Dun & Bradstreet supplies business identity checks and credit risk data, according to Coinfomania.
A key feature is the SME Bankable Profile, an on-chain record anchored to Dun & Bradstreet data. It lets a small business carry its credit profile alongside a payment as that payment moves through the system, Grafa reported. That means lenders and counterparties can assess risk in real time, without waiting for separate paperwork.
Bank of England Sets £40 Billion Cap on Sterling Stablecoins
Eight weeks before Phase 2 launched, the Bank set a temporary £40 billion issuance cap on systemic sterling stablecoins, according to Coin Law. Issuers must also hold at least 30% of their backing assets in central bank deposits. The rules are designed to limit risk to financial stability if a large stablecoin were to fail.
The cap matters directly to this test. The lab is exploring how private stablecoins and central bank money might coexist in trade finance. The new guardrail sets the outer boundary for how big stablecoin issuance can get while that exploration continues, Crypto Times reported.
What the Bank Has Not Yet Decided — and Why It Matters
The Bank of England has not decided whether to issue a consumer-facing digital pound. Digital Pound Labs is a sandbox for testing technical and regulatory questions, not a sign that a retail digital pound is coming soon, according to Grafa.
The stakes go beyond payments. How central bank money and private stablecoins interact could affect monetary policy, financial stability, and how regulators oversee digital finance. Phase 2 is meant to surface those questions in a controlled setting before any policy decisions are made, Coindoo reported.
Sentiment
Mostly PositivePublishers
17
Articles
10
Reach
27
