Polygon Labs has joined Phase 2 of the Bank of England's Digital Pound Lab as part of a consortium with NOBO Finance and Dun & Bradstreet. The test places the Polygon network at the center of a question central banks have not publicly resolved: whether a stablecoin and a simulated digital pound can settle opposite sides of the same cross-border trade payment without either leg waiting on the other.
The lab operates in a controlled simulation. It has no real customers, no real money, and no formal regulatory review tied to what gets tested. The Bank of England has been exploring distributed ledger technology and CBDC concepts since 2024. Phase 2 moves the work further by putting two different forms of programmable money into a single payment flow to see if they can operate as one.
How the cross-border settlement test works
The specific scenario the consortium is running goes like this: an exporter receives payment via stablecoins, while a UK importer settles in a digital pound. Both legs run through a single orchestration flow. Polygon covers the stablecoin settlement side through its Open Money Stack, which supplies the smart contract infrastructure on the Polygon network. The digital pound leg settles on the Bank of England's simulated test rails.
Polygon described the lab as a setting to "experiment with how our own infrastructure handles digital pound mechanics without the cost, risk, or regulatory runway of a live pilot." The Open Money Stack was built so that settlement would not depend on which rail a business happens to be closest to.
"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. This experiment tests exactly that. Interoperability is what gets value moving, and it's what our Open Money Stack is built to enable. Regulators and central banks are asking the right questions, and we're glad to be participating in that conversation at the infrastructure level," said Marc Boiron, CEO of Polygon Labs.
The fragmentation problem behind the test
The case for running this experiment comes from a structural gap in how money moves through global trade. Bank money, stablecoins, tokenized deposits, and potential central bank digital currencies operate on separate rails that do not communicate well. When those forms cannot settle against each other at par and on demand, liquidity gets trapped and settlement risk returns.
"Cross-border SME trade finance is still slowed by fragmented verification, manual checks, and settlement that can take days," the consortium said in a statement. "For small businesses, the gap between shipping goods and receiving payment is frozen capital."
Otto Jacobsson, U.K. chapter lead at the Digital Assets Association, addressed the downstream effect for smaller businesses in a LinkedIn interview.
"If these processes can become faster and more efficient, U.K. businesses could unlock working capital sooner and make it easier to finance international trade," he said.
The SME Bankable Profile workstream and what it adds
NOBO Finance was already part of Phase 1, where it helped demonstrate conditional business-to-business escrow payments relevant to trade finance. In Phase 2, NOBO leads a separate workstream called the SME Bankable Profile. The concept is a portable credit identity for small businesses that travels alongside the payment rather than sitting locked inside a single bank's system.
Dun & Bradstreet supplies the verified business identity and credit data that anchor each profile. Polygon provides the onchain infrastructure that lets the profile move with the transaction. Smart contracts handle the verified outcome and manage consent. The design draws on wallet transaction data and open-finance information to build a reusable credit assessment that a business can carry from one transaction to the next.
Trade finance delays currently make it harder for small businesses to demonstrate creditworthiness and access funding, Jacobsson noted. The bankable profile workstream is built to address that directly, letting a credit identity become portable rather than starting from scratch at each institution.
What the lab participation does and does not signal
The findings from Phase 2 will feed into the Bank of England and HM Treasury's joint assessment of the digital pound ahead of their planned next steps later in the year. That assessment does not commit either institution to a specific design or timeline for a digital pound.
Polygon stated clearly in its announcement that participation "doesn't imply Bank of England endorsement of Polygon Labs or its products, and the use cases we're testing don't indicate future Bank policy or the final design of a digital pound. They're a way to learn, together with the Bank and other participants, what actually works before anyone builds it for real."
The consortium has committed to sharing what it learns when Phase 2 concludes. Separate from the settlement test and the bankable profile, both of which depend on Polygon's onchain infrastructure, the broader question the lab is designed to answer remains open: whether different forms of programmable money can interoperate without forcing businesses or counterparties onto a single payment infrastructure.
Roman Zaika
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