Bank of England Tests Stablecoin-Central Bank Digital Currency Interoperability

The Bank of England has launched Phase 2 of its digital pound exploration, focusing on whether stablecoins and central bank digital currencies can coexist within a single payment flow for trade finance. This trial skips past the debate over which one is better, instead asking if they can work together.

In this experiment, public stablecoin infrastructure will be paired with central bank money to process a trade finance transaction between two parties. The participants in the trial are NOBO Finance, Dun & Bradstreet, and Polygon Labs, which is supplying the stablecoin settlement infrastructure through its Open Money Stack.

The BOE's goal is to explore how different forms of digital money can interoperate, rather than forcing companies and customers onto a single payment infrastructure. This trial is part of the bank's ongoing assessment of the digital pound ahead of its next steps later this year.