The Bank of England Tests Interoperability Between Stablecoins and Digital Pound in Cross-Border Trade

The Bank of England is already preparing for the coexistence of stablecoins and the digital pound. Its Digital Pound Lab is testing a cross-border payment in which an exporter receives an advance in stablecoin before a British importer settles the transaction with simulated digital pounds. However, London has yet to decide on launching its CBDC.

In Brief

• The Bank of England is testing a payment that combines stablecoins and simulated digital pounds.
• The experiment particularly concerns financing for SMEs engaged in international trade.
• The UK has not yet decided to officially launch its digital pound.

Stablecoins Enter the Digital Pound Lab

The test is being conducted with NOBO Finance, Dun & Bradstreet, and Polygon Labs. This comes as the Bank of England is already working on a new framework for stablecoins in sterling.

The chosen scenario involves a company selling goods abroad. The exporter first receives an advance via a system using a stablecoin. The buyer located in the UK then makes the payment with a simulated digital pound.

However, there are no real clients or real digital pounds yet. The Digital Pound Lab operates as a testing environment. The Bank of England also clarifies that the experiments conducted there do not predict its future decisions.

Thus, the British digital pound remains hypothetical.

This does not prevent the BoE from testing its uses. And especially its connections with other payment methods. A potential British CBDC will indeed need to circulate with bank deposits, existing payment systems, and probably stablecoins. The current experiment gives a first idea of this mix.

Cross-Border Trade Particularly Interests London

The choice of international trade is not a coincidence. SMEs that export can wait several days to receive their money after shipping goods. This delay immobilizes their cash flow and sometimes complicates access to financing.

NOBO Finance aims to reduce this gap through stablecoins. Dun & Bradstreet provides data regarding companies and commercial risk. Polygon, for its part, supplies the smart contract infrastructure.

A second project is also planned. It involves creating reusable credit profiles for small businesses by combining transaction data, information from open finance, and commercial data from Dun & Bradstreet.

Payment and credit thus find themselves in the same project.

Stablecoins have already begun to gain ground in international transfers. For example, MoneyGram has just expanded its infrastructure to Solana to convert cash and stablecoins. Its service covers withdrawals in over 170 countries.

The Bank of England is therefore entering a field where the private sector is already advancing. For it, the question is less about whether multiple digital currencies will coexist than about how they can communicate with each other.

Cross-border trade is a good place to try.

London is Also Preparing Its Rules on Stablecoins

The Bank of England is not only working on the digital pound. In June, it published new proposals regarding systemic stablecoins denominated in sterling. Issuers could place up to 70% of their reserves in interest-bearing UK government debt.

A temporary cap of £40 billion per systemic stablecoin is also being considered. The previous limits set for individual and corporate holdings have been abandoned. The final regulation is expected to be finalized by the end of 2026 for implementation planned in 2027.

Modernization is also affecting traditional banking infrastructures. The BoE aims to bring its RTGS and CHAPS systems closer to almost permanent operation, including on weekends. International payments and tokenization are among the reasons cited.

Stablecoins are no longer treated as a crypto curiosity in London. They are gradually entering discussions about the very architecture of British payments.

The movement is also surpassing the UK. The use of these assets is progressing in transfers, crypto cards, and everyday payments. Recently, stablecoins accounted for 84% of observed spending on certain crypto cards. The digital pound remains to be seen. The Bank of England continues its trials without promising that it will ever come to fruition. Stablecoins, however, no longer need to wait for this decision.