BoE tests stablecoin-digital pound link in cross-border trial

The Bank of England’s Digital Pound Lab carried out an experiment with NOBO Finance, Dun & Bradstreet and Polygon Labs to test whether stablecoins and a simulated digital pound can operate in the same cross-border trade finance payment flow, the participants announced Wednesday.

In the simulated transaction an exporter received an advance via a stablecoin payment rail while a UK importer completed settlement using a digital-pound simulation. The test used no real customers or funds.

A separate workstream in the project built reusable credit profiles for small and medium-sized businesses. Those profiles combined transaction records, open-finance data and Dun & Bradstreet commercial risk information. Polygon provided smart contract infrastructure to automate parts of the flow.

The Lab said the trial was intended to test whether tokenised payment rails and a central bank digital currency prototype could shorten settlement times and reduce working capital pressure for smaller firms that often wait days for cross-border payments to clear.

The Bank of England noted that the experiment does not mean it will issue a digital pound and that lab trials should not be read as endorsements of participating companies or as signals of future policy.

The test comes as UK authorities develop rules for stablecoins and prepare payment infrastructure for tokenised assets. In June the Bank published draft rules for sterling-denominated stablecoins judged to be systemic, allowing issuers to hold up to 70% of reserves in interest-bearing government debt and imposing a temporary £40 billion issuance cap per systemic stablecoin. The Bank aims to finalise the rules by the end of 2026 ahead of a planned 2027 rollout. Under the draft, systemic stablecoins would fall under the Bank of England’s supervision while non-systemic tokens would remain under the Financial Conduct Authority.

Regulatory work is running alongside technical upgrades to core payment systems. In May the Bank proposed moving its Real-Time Gross Settlement and CHAPS systems to near-24/7 operation, including weekends, to better support cross-border payments and new settlement models linked to tokenisation. In July the Bank approved HSBC’s Orion platform to operate in the UK’s Digital Securities Sandbox, where it is expected to support digital bond issuance and the planned Digital Gilt Instrument.