--- title: "Polygon Puts Stablecoins Inside BoE’s Digital Pound Test" date: 2026-08-12 author: "Kathleen Kinder" featured_image: "https://coinlaw.io/wp-content/uploads/2026/08/polygon-bank-of-england-digital-pound-lab-test.jpg" categories: - name: "Payments" url: "/payments.md" tags: - name: "News" url: "/tag/news.md" --- # Polygon Puts Stablecoins Inside BoE’s Digital Pound Test Polygon Labs settled a stablecoin leg against a simulated digital pound in the Bank of England’s Digital Pound Lab, eight weeks after the Bank capped systemic sterling stablecoin issuance at 40 billion pounds. - Polygon Labs settled a stablecoin payment against a simulated digital pound inside the Bank of England’s own test environment. - The Bank listed the consortium behind the test, NOBO Finance with Dun and Bradstreet and Polygon, in its Phase 2 update. - The test ran eight weeks after the Bank set a temporary £40 billion issuance guardrail for each systemic sterling stablecoin. Polygon Labs ran a cross-border payment in which one leg moved in stablecoins and the other settled in a simulated digital pound, the company disclosed on August 12, and the Bank of England’s [Phase 2 update](https://www.bankofengland.co.uk/the-digital-pound/lab/digital-pound-lab-phase-2-update) names the consortium that built it. An exporter takes payment in stablecoins on **Polygon’s Open Money Stack**. A UK importer settles in a digital pound on the Lab’s simulated rails. Both legs clear through one orchestration flow. The Bank has already written rules for one of those two forms of money. On June 22 it published a policy statement and a draft Code of Practice for sterling systemic stablecoins, setting a “t**emporary issuance guardrail on the level of issuance per systemic stablecoin of £40 billion**” and requiring issuers to hold “**a minimum of 30% of its backing assets in central bank deposits at the Bank**.” It has made no decision on whether the second form, the digital pound, will exist at all. > NEW: Polygon has been selected to participate in the Bank of England’s Digital Pound Lab, with NOBO and Dun & Bradstreet. > > With our work building the Open Money Stack, we’re testing what’s possible for a digital pound and cross-border stablecoin settlement. [pic.twitter.com/DzpTK8x7Rx](https://t.co/DzpTK8x7Rx) > > — Polygon | POL (@0xPolygon) [August 12, 2026](https://x.com/0xPolygon/status/2087499654397350378?ref_src=twsrc%5Etfw) ## A settlement test that assumes both sides of a rulebook that is only half written **NOBO Finance** leads the consortium. Dun and Bradstreet supplies the verified business identity and credit data that anchor each profile. Polygon contributes the smart contract infrastructure for the stablecoin leg and, in a second workstream called the SME Bankable Profile, the onchain rails that let a small business credit identity travel with the payment. According to Global Trade Review, the settlement flow is built around electronic bills of lading, with exporters advanced funds in stablecoins while UK importers settle in digital pounds. The target is a financing gap the **Asian Development Bank** has put at **$2.5 trillion** globally. The same ADB work found SME trade finance rejection rates ran at **41%** in 2025, improved from 45% in 2023. **Marc Boiron**, CEO of Polygon Labs, framed the exercise as a test of fungibility across money types. He said: “ 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. Interoperability is what gets value moving. Marc BoironCEO – Polygon Labs ## What the Lab proves? The Bank is blunt about the limits of its own venue. The Lab “**is not a regulatory sandbox and no real customers or real money payments will be involved,**” and the Bank states that inclusion in the Phase 2 update “**does not imply Bank approval or endorsement of the firms, their products or their services.**” Polygon repeated that caveat in its own post. So the demonstration establishes that an orchestration layer can move a stablecoin leg and a simulated central bank leg without either waiting on the other. It does not establish that a sterling stablecoin under a **£40 billion** ceiling could carry commercial trade volumes, or that any regulator would permit the flow in production. The consortium tested a mechanism. Nobody tested a market. Several questions sit unanswered as of press time. Which stablecoin carried the exporter leg, and would it fall inside the systemic perimeter. Whether the guardrail bites on issuance alone or constrains settlement throughput. When the consortium publishes results, and whether that lands before the [stablecoin consultation](https://www.bankofengland.co.uk/paper/2026/boe-and-fcas-approach-to-joint-regulation-of-systemic-stablecoin-issuers) closes. What the joint Bank and HM Treasury assessment concludes. ## Firms issuing sterling stablecoins have a live window Any firm already issuing or planning a sterling stablecoin is inside the consultation window right now. The Bank’s paper states that “**this consultation closes on 30 September 2026,**” which is the practical deadline for arguing the guardrail figure or the backing composition. Treasury teams can also model whether a reserve mix clears the 30% central bank deposit floor against the permitted holding of “**short-term UK government debt securities of six months or less in maturity**.” The perimeter does not wait: “**From 25 October 2027, the FCA’s remit will include stablecoin issuance, along with other defined regulated activities.**“ The Bank’s stated aim in the joint paper is “to provide regulatory clarity and certainty to firms issuing stablecoins in the UK whatever the size, aspirations or business model.” That clarity now runs ahead of the thing the Lab was built to explore. Sterling stablecoins have a rulebook, a cap and a start date. The digital pound has a design phase, a required act of Parliament and an earliest issue date somewhere in the second half of this decade. Set against the pace of [central bank digital currency programs](https://coinlaw.io/cbdc-statistics/) and the [stablecoin market](https://coinlaw.io/stablecoin-statistics/), the sequencing reads as a handoff of urgency. The consortium’s architecture carries that reading: the private leg had to work, the central bank leg had to be simulated. The [regulatory calendar](https://coinlaw.io/cbdc-regulations-statistics/) will settle that question before the technology does, and for firms settling cross-border payments today, only one of the two legs is real. The Lab’s published run ended in July. The consultation closes on September 30. The FCA perimeter opens on October 25, 2027. The digital pound decision still has no date on it. Definition of Smart Contract. Link to full glossary entry follows the description.**Smart Contract**A smart contract is a self-executing program stored on a blockchain that automatically enforces agreement terms when predefined conditions are met, without intermediaries. [Read more](https://coinlaw.io/glossary/smart-contract/) Definition of Cross-Chain. Link to full glossary entry follows the description.**Cross-Chain**Cross-chain is the ability to move data or assets between separate blockchains via bridges, messaging protocols, or interoperability networks. [Read more](https://coinlaw.io/glossary/cross-chain/)