Bank of England Tests Stablecoins, Digital Pounds for Cross-Border Payments

The Bank of England is expanding its digital currency experiments to cross-border payments, launching a test that will examine whether stablecoins and a potential digital pound can work together in the same international transaction.

The experiment forms part of Phase 2 of the Bank's Digital Pound Lab and brings together Polygon Labs, NOBO Finance, and Dun & Bradstreet. The consortium will focus on trade finance for small and medium-sized businesses, using blockchain infrastructure to test whether international payments can become faster and more efficient.

The project is significant because it does not treat stablecoins and central bank digital currencies as competing payment systems. Instead, the Bank is testing whether privately issued digital money and central-bank money can perform different parts of the same transaction.