Bank of England to Test Whether Stablecoins and a Digital Pound Can Settle the Same Trade

A group including Polygon Labs will test an exporter paid in stablecoins and a UK importer settling in digital pounds, inside the same payment flow.

The Bank of England is testing whether a privately issued stablecoin and a central bank digital currency can settle opposite legs of the same cross-border trade. Polygon Labs said Tuesday that it is participating in Phase 2 of the bank’s Digital Pound Lab, an experimental platform that simulates a digital pound without real money or customers, alongside NOBO Finance, Dun & Bradstreet.

The consortium is running two connected workstreams. The first, an SME Bankable Profile led by NOBO, creates a risk profile for small businesses and Dun & Bradstreet’s offers the data that builds the profile. Polygon Labs supplies the smart contract infrastructure. The test involves an exporter paying in stablecoins using rails built on Polygon’s Open Money Stack, while a UK importer makes final settlement in digital pounds on the central bank’s simulated rails.

This story is an excerpt from the Unchained Daily newsletter.

Regulators have largely framed private stablecoins and central bank money as rivals for the same payment volume. This experiment assumes both will exist and asks whether they can settle against each other on demand inside a single flow. “For digital money to actually move the world’s trade, its different forms have to work together,” said Marc Boiron, CEO of Polygon Labs.

Findings feed a joint assessment by the central bank and HM Treasury ahead of next steps later this year, and nothing tested commits the UK to issuing a digital pound. Polygon Labs pivoted to payments in January after buying Coinme and Sequence.

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