Bank of England Tests Stablecoin-Digital Pound Interoperability for Trade Finance

The Bank of England is testing how stablecoins and a potential digital pound can be used in cross-border payments for trade finance. The experiment, led by NOBO Finance, Dun & Bradstreet, and Polygon Labs, aims to reduce settlement delays and ease financing constraints for small and medium-sized businesses involved in international trade.

The Digital Pound Lab experiment simulates cross-border trade settlement using stablecoins and a digital pound. An exporter can receive an advance through a stablecoin rail while a UK importer completes settlement using simulated digital pounds. The project also includes building reusable credit profiles for small businesses by combining transaction data, open-finance information, and commercial risk data.

The test uses no real customers or money, and the Bank of England stresses that participant-designed experiments in the lab should not be read as signals of future policy or endorsements of the companies involved. The regulator aims to finalize draft rules for sterling-denominated stablecoins by the end of 2026 before a planned 2027 rollout.

UK regulators are developing a broader framework for stablecoins and tokenized assets, including changes to conventional payment infrastructure. The Bank of England proposed moving RTGS and CHAPS toward near-24/7 operation in May, partly to support cross-border payments and new settlement models as tokenization develops.