Bank of England Digital Pound Lab enters Phase 2 with Polygon Labs

The Bank of England has entered Phase 2 of its Digital Pound Lab, selecting a consortium including Polygon Labs, NOBO Finance, and Dun & Bradstreet to test digital payment interoperability. The initiative focuses on improving cross-border trade finance for small and medium-sized enterprises (SMEs) by exploring how private stablecoins and a potential central bank digital currency (CBDC) can settle within a single transaction flow.

The trial involves two primary workstreams. One project tests a cross-border settlement model where an exporter receives payment via a stablecoin—supported by Polygon’s Open Money Stack—while a UK importer settles the transaction using a simulated digital pound. The second workstream, led by NOBO Finance, aims to create an ‘SME Bankable Profile.’ This uses Dun & Bradstreet’s commercial data and Polygon’s smart contracts to build reusable, verifiable credit identities for small businesses.

The Digital Pound Lab operates as a simulated environment using no real money or customers. Participation does not constitute an endorsement of any specific technology, nor does it signal a final decision by the Bank of England or HM Treasury to issue a digital pound. The findings from these experiments will inform future policy and regulatory assessments regarding digital assets and programmable money in the UK.