The Bank of England has brought Polygon Labs, NOBO Finance and Dun & Bradstreet into Phase 2 of its Digital Pound Lab, an experiment that will try to settle a single trade finance deal across two different kinds of digital money. Announced Wednesday, the tests will route a stablecoin advance to an exporter while a UK importer completes final settlement in digital pounds. It is the first time the lab has run public stablecoin infrastructure and central bank money through one payment flow, and the first time it has attached that flow to a portable credit identity for small businesses. No real customers and no real money are involved.
A central bank digital currency, or CBDC, is a digital form of a country’s official money issued by the central bank itself rather than by a commercial bank or a private firm. Invoice factoring is the practice of selling an unpaid invoice to a financier at a discount so the seller gets cash immediately instead of waiting for the buyer to pay.
Key takeaways
- NOBO Finance, Dun & Bradstreet and Polygon Labs joined Phase 2 of the Bank of England’s Digital Pound Lab, announced 12 August 2026.
- One workstream builds a reusable SME credit profile from wallet transaction data, open finance records and Dun & Bradstreet commercial intelligence.
- A second tests invoice factoring backed by an electronic bill of lading, with a stablecoin advance to the exporter and digital pound settlement by the UK importer.
- The lab uses no real customers or money, and the Bank has made no decision to issue a digital pound.
Published: 12 August 2026, 16:00 UTC
Why the Bank picked small business trade finance
Cross-border trade finance is where the gap between shipping goods and getting paid is widest, and small firms carry the cost. Verification pulls in several counterparties, checks are still done manually, and settlement can run for days. NOBO said that stretch leaves working capital frozen for exporters who have already delivered.
The problem is as much about proof as about payment. Trade finance delays make it harder for small companies to demonstrate creditworthiness, which in turn slows access to funding, according to Otto Jacobsson, UK chapter lead at the Digital Assets Association, speaking to CoinDesk. “If these processes can become faster and more efficient, UK businesses could unlock working capital sooner and make it easier to finance international trade,” he said.
What the two workstreams actually test
The first workstream builds what the group calls an SME Bankable Profile, a credit assessment a business can reuse rather than rebuild for every lender. NOBO leads it, Dun & Bradstreet supplies the commercial intelligence and risk indicators its Commercial Graph already feeds to credit teams, and Polygon provides smart contracts that record the verified outcome and manage consent. A smart contract is code deployed on a blockchain that executes automatically when its conditions are met, without a middleman confirming each step.
“Smoother trade finance for SMEs depends on trust,” said Sara de la Torre, head of financial services at Dun & Bradstreet. The profile is meant to stay under the small business’s control and travel with it between financiers.
The second workstream is the one that breaks new ground for the lab. An exporter receives an advance in stablecoins, a UK importer settles in digital pounds, and the transaction is backed by an electronic bill of lading. Polygon Labs handles the stablecoin leg through its Open Money Stack, covering fiat-to-stablecoin conversion, embedded wallets and the settlement contracts.
“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,” Polygon Labs chief executive Marc Boiron said in the statement. “This experiment tests exactly that.”
Where this fits in the UK payments stack
The Bank has spent 2026 building the pieces around a multi-format payments system rather than a single one. It finalized sterling stablecoin rules in June, dropping individual holding caps and setting a £40 billion issuance ceiling per systemic token. Deputy Governor Sarah Breeden said in May that the UK’s retail payment infrastructure could accommodate tokenized bank deposits, regulated stablecoins and a digital pound at the same time. Sixteen firms including HSBC and Euroclear are preparing tokenized asset launches through the Digital Securities Sandbox from late 2026.
The contrast with Washington is hard to miss. The US Senate voted 85-5 to ban a Federal Reserve retail digital dollar until 2030, while the two governments published a joint roadmap on tokenized finance in July. Britain is testing the combination the US has legislated against.
For Polygon, the lab is a public-sector reference for infrastructure it has been selling to payment firms. PayPal USD went live natively on the Open Money Stack in July, and the company says its network has settled more than $2.6 trillion in stablecoin transactions, with Revolut and Stripe among its users, according to a press release detailed by crypto.news.
What happens next
Findings from Phase 2 feed into the joint Bank of England and HM Treasury assessment of the digital pound, which is due to inform the project’s next steps later this year. That assessment, not the lab itself, is where a decision on issuance would eventually sit.
The caveat the Bank keeps repeating is worth taking seriously. The Digital Pound Lab runs on synthetic data, with no live customers and no real funds, and participation does not commit the central bank to anything. What Phase 2 will produce is evidence on a narrow question: whether privately issued stablecoins and central bank money can pass value between each other inside one commercial transaction, or whether businesses still get forced onto a single rail.
Frequently asked questions
Has the Bank of England decided to launch a digital pound?
No. The Digital Pound Lab is an experimental programme using no real customers or money. The Bank has said repeatedly that its work examines the design and infrastructure a digital pound would need if policymakers later choose to issue one.
What is Polygon Labs contributing to the experiment?
Polygon supplies the stablecoin settlement leg through its Open Money Stack, including fiat-to-stablecoin conversion, embedded wallets and the smart contracts used for consent management and deal lifecycle. It is not issuing the central bank money being tested.
Why does combining stablecoins and a CBDC matter for businesses?
Most trade transactions involve counterparties in different jurisdictions using different payment systems. If stablecoins and central bank money can settle separate legs of the same deal, exporters could be paid faster without forcing every party onto one payment network.
