Key Takeaways:
The Bank of England has expanded its Digital Pound Lab into Phase 2, partnering with Polygon Labs, NOBO Finance, and Dun & Bradstreet to test stablecoin and digital pound infrastructure for cross-border SME trade finance.
"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," Marc Boiron, CEO of Polygon Labs, said.
The trial runs two connected workstreams. One develops a reusable SME Bankable Profile combining transaction data, open finance information, and Dun & Bradstreet's commercial intelligence to generate pre-qualified credit assessments. The second tests invoice factoring where exporters receive stablecoin advances while UK importers complete final settlement in digital pounds.
The experiment addresses a persistent problem: payment delays and manual verification tie up working capital for smaller companies engaged in international trade. The Digital Pound Lab operates in a simulated environment with no real customers or money, and the Bank of England has not committed to issuing a consumer-facing digital pound. The design phase runs through mid-2026.
SME Bankable Profile targets financing friction
The first workstream aims to eliminate duplicate verification procedures. NOBO will merge authorized transaction history from consent-based wallets with open banking data and Dun & Bradstreet's Commercial Graph to create a portable credit profile. Polygon's smart contracts will manage consent, verification, and the lifecycle of financing deals.
"Smoother trade finance for SMEs depends on trust," Sara de la Torre, head of financial services at Dun & Bradstreet, said. The profile is designed to remain under the small business's control and travel with it when seeking financing from different providers.
Stablecoins and digital pounds settle one trade
The second workstream tests whether private stablecoins and central bank-issued digital money can operate within a single trade finance transaction. An exporter would receive an advance through a stablecoin payment while a UK importer completes final settlement using digital pounds. Polygon Labs provides the stablecoin infrastructure through its Open Money Stack, which combines fiat conversion, wallets, and stablecoin settlement.
Polygon has been expanding its stablecoin infrastructure throughout 2026. The network reduced its average block time to 1.75 seconds in May, lifting theoretical throughput to about 3,260 transactions per second. PayPal USD became natively available through the Open Money Stack in July, and Polygon reports more than $2.6 trillion in cumulative stablecoin settlements.
The Bank of England finalized its stablecoin rules in June, setting a £40 billion issuance limit per token and requiring issuers to hold up to 70 percent of reserves in short-term government debt. Deputy Governor Sarah Breeden has said the UK's future retail payment infrastructure could accommodate tokenized bank deposits, regulated stablecoins, and a possible digital pound. Sixteen companies, including HSBC and Euroclear, are preparing tokenized asset launches through the Bank of England and Financial Conduct Authority's Digital Securities Sandbox.
NOBO Finance, which completed Phase 1 with a programmable business escrow solution, will coordinate the trade finance model. The company does not lend directly but provides infrastructure through which SMEs and financiers can structure, verify, and settle transactions.
"The Digital Pound Lab gives us a safe environment to test our innovations," Ayo Ojerinola, founder and CEO of NOBO Finance, said.
The Bank of England has not decided to issue a digital pound. The Lab's design phase runs through mid-2026, at which point the central bank will assess whether to proceed with issuance.
This article is for informational purposes only and does not constitute investment advice.
