The Bank of England launches a large-scale experiment: stablecoins and the digital pound will be combined in cross-border settlements.
The United Kingdom's regulator is moving to the practical testing phase of a future national digital currency. As part of the second wave of experiments in the Digital Pound Lab, the Bank of England, together with Polygon Labs, NOBO Finance, and Dun & Bradstreet, is examining how stablecoins and a potential digital pound could coexist in real financial operations.
The key focus is trade finance, where a hybrid settlement model could deliver tangible benefits. In one of the developed scenarios, an exporter receives prepayment in stablecoins, accelerating working capital and reducing currency risks at the early stages of the transaction. The final settlement, however, is conducted by the British importer in digital pounds, ensuring transparency and state oversight of the transaction's final stage.
Why this matters for the market
This approach demonstrates the regulator's pragmatism: instead of rigidly opposing private stablecoins and a state-issued CBDC, the Bank of England is exploring their complementarity. For businesses, this signals that the future infrastructure will be multi-currency and interoperable, rather than monolithic. The use of Polygon Labs as a technology partner also confirms that layer-2 solutions and blockchain interoperability are viewed as critically important components.
Of particular interest is the involvement of Dun & Bradstreet — this indicates that the regulator is working through not only the settlement side but also issues of credit scoring and compliance within automated flows. Integrating counterparty data into smart contracts could be a breakthrough in reducing fraud in international trade.
It is telling that the experiment is being conducted against the backdrop of the global CBDC race, where the UK aims to carve out a niche as a technological leader without repeating the mistakes of overly slow pilot projects. The results of the second phase of the Digital Pound Lab are likely to serve as the foundation for legislative initiatives defining the legal status of stablecoins in the kingdom.
My expertise: The success of this scenario depends on whether the Bank of England can ensure instant conversion between stablecoins and the CBDC without price slippage. If the regulator resolves the issues of liquidity and jurisdictional risks, we will see the world's first working hybrid circuit for B2B settlements, which other central banks could adopt as a model.