The Bank of England has launched Phase 2 of its Digital Pound Lab with NOBO Finance, Dun & Bradstreet, and Polygon Labs.
The central bank announced the development on Wednesday, as monetary authorities worldwide continue to examine how privately issued stablecoins and potential central bank digital currencies (CBDCs) might coexist.
According to CoinDesk, the BOE has been experimenting with a CBDC and the distributed ledger technology underpinning blockchain networks since 2024. The new phase marks the first time the Digital Pound Lab has tested how public stablecoins and central bank money could function together in a single payment flow, alongside a portable credit identity designed for small businesses. The lab does not involve real customers or funds, and the BOE said the initiative does not indicate any decision to issue a digital pound.
Three organisations have been named as participants: NOBO Finance, a UK-based fintech building digital trade finance infrastructure aimed at making small and medium-sized enterprises (SMEs) more visible, verifiable, and bankable, Dun & Bradstreet, a global provider of business decisioning data, analytics, and credit-rating services, and Polygon Labs, a blockchain software company. NOBO Finance was also involved in Phase 1, during which it helped demonstrate conditional business-to-business escrow payments relevant to trade finance workflows.
Bankable profiles and invoice factoring
The first workstream will focus on building an SME ‘bankable profile’ by combining wallet transaction data, open-finance information, and business intelligence into a reusable credit assessment. Polygon Labs will supply smart contracts intended to record verified outcomes and manage consent, drawing on its Open Money Stack, which includes fiat-to-stablecoin conversion, wallet infrastructure, and smart contracts.
Furthermore, a second workstream will trial invoice factoring backed by electronic bills of lading. Under this model, an exporter would receive an advance through stablecoin technology, while a UK importer settles the final payment in digital pounds.
Industry relevance and next steps
According to Otto Jacobsson, UK chapter lead at the Digital Assets Association, faster and more efficient trade finance processes could allow UK businesses to access working capital sooner and simplify international trade financing. He noted that delays in trade finance make it harder for smaller firms to demonstrate creditworthiness and secure funding.
Polygon Labs chief executive Marc Boiron said the experiment tests whether public and private forms of digital money, including central bank money and stablecoins, can work together to support global trade.
The participating group said findings from the Digital Pound Lab will inform a joint assessment by the BOE and the UK Treasury on the digital pound, ahead of further steps expected later this year. The broader question under examination is whether different forms of digital money can interoperate, rather than requiring businesses and consumers to rely on a single payment infrastructure.
