Polygon Joins Bank of England's Digital Pound Lab to Test Onchain Trade Finance for SMEs

Polygon Labs has been selected to participate in Phase 2 of the Bank of England's Digital Pound Lab, a program exploring how a potential digital pound could function in practice. Announced on August 12, the appointment pairs Polygon with NOBO Finance Limited and Dun & Bradstreet to trial simulated, onchain trade finance use cases aimed at small and medium-sized enterprises. Phase 2 is expected to run from roughly November 2025 to July 2026. The Lab will examine how private stablecoins could interact with a central bank digital currency in real-world payment situations—but only in a controlled test environment. No customers are involved and no real money will move; the work is designed as a sandbox rather than a launch. The consortium will pursue two tracks. One focuses on building reusable, portable credit profiles for SMEs, creating financial identities that could be used across lenders and platforms. The other tests cross-border trade finance flows, including invoice factoring scenarios where a digital pound and stablecoins would need to operate together across jurisdictions. Polygon's role centers on its Open Money Stack, a toolkit for stablecoin settlement, embedded wallets and smart contract deployment. Dun & Bradstreet contributes commercial credit data, while NOBO Finance provides trade finance modeling. The Bank of England's Phase 2 framework puts an emphasis on participant-led applications, inviting firms to propose scenarios and then stress-test them within the Lab. Polygon Labs CEO Marc Boiron highlighted interoperability as the core theme, arguing that global trade will require public and private forms of digital money to work seamlessly together. Interoperability between stablecoins and a simulated digital pound is likely to be the most significant element of the exercise. Invoice factoring—the sale of unpaid invoices at a discount in exchange for immediate cash—offers a demanding test case due to its multi-party structure, cross-border payments, credit assessment needs and time-sensitive settlement. The SME credit-profile workstream also carries broader market implications. SMEs make up the majority of businesses in most economies yet remain persistently underserved in trade finance. The global trade finance gap, reflecting unmet SME demand versus bank supply, is measured in the trillions of dollars.