A pilot project within the Digital Pound Lab environment is testing the interconnection of crypto-assets and state digital money. At the same time, the United Kingdom is adjusting rules for systemic stablecoins and preparing its payment infrastructure for continuous operation.

Simulated experiment for potentially accelerating international trade

Through its Digital Pound Lab testing environment, the British central bank has begun examining whether private stablecoin infrastructure can function effectively within a single payment chain alongside a potential digital pound. As part of the new pilot project, the Bank of England has joined forces with NOBO Finance, Dun & Bradstreet and Polygon Labs. The latter company provides the smart-contract infrastructure and technological layer required to automate the entire process. The experiment simulates a trade relationship between a foreign exporter and a British importer. In the first phase, the exporter receives an advance payment through a stablecoin network, while the final settlement of the trade is carried out by the importer using simulated digital pounds.

This combined model is intended to address long-standing shortcomings of traditional cross-border trade, which disproportionately affect small and medium-sized enterprises in particular. These often face situations in which they wait several days for payment after dispatching goods, leading to unnecessary working-capital lock-up, deterioration in liquidity and increased dependence on external financing. Linking fast stablecoin transfers with final settlement in a central bank digital currency is intended to demonstrate a path towards significantly shorter settlement times and simplified financing of international trade.

Creditworthiness assessment of small businesses and clear boundaries of testing

The project also includes a separate workstream focused on simplifying access to capital for small and medium-sized enterprises. As part of it, the partners are developing a system of reusable credit profiles. These profiles combine real transaction data with the open-finance concept and business or credit risk assessments from Dun & Bradstreet. The aim is to enable financial institutions to assess the creditworthiness of smaller companies more quickly and accurately when they apply for trade financing.

However, the Bank of England emphasizes that the Digital Pound Lab project is subject to strict limitations. No real money is used in the experimental environment and no real customers are involved in the testing. The central bank also points out that conducting the tests does not constitute a decision to issue a digital pound and that project participants do not determine the bank’s future policy. The testing is also unrelated to any official endorsement of specific technologies or participating commercial entities.

More flexible reserves and temporary issuance limits for stablecoins

In parallel with the technological tests, the development of the British regulatory framework is also progressing. In June 2026, the Bank of England presented proposed rules for systemic pound-denominated stablecoins that, given the scale of their use, could affect the country’s financial stability. A fundamental shift concerns the adjustment of requirements for reserve assets. While the original proposal from 2023 required 100% backing through deposits held directly at the central bank, the new model allows issuers to hold up to 70% of reserves in interest-bearing government bonds.

Another change is the abandonment of plans to introduce individual limits on stablecoin holdings for individuals and companies. Instead, the proposal introduces a temporary cap on the total issuance of a specific systemic stablecoin of GBP 40 billion, representing approximately USD 52.8 billion. Regulatory oversight will be divided according to the significance of the tokens: systemic stablecoins will be overseen by the Bank of England, while non-systemic ones will remain under the authority of the Financial Conduct Authority (FCA). The final form of the rules is expected to be completed by the end of 2026, with the regime planned to launch in 2027.

Continuous settlement operations and tokenization of capital markets

Efforts to modernize British financial infrastructure also extend to traditional payment systems. In May 2026, the Bank of England proposed extending the operating hours of the key Real-Time Gross Settlement (RTGS) and CHAPS settlement platforms to an almost continuous, near-24/7 regime. Extending daily operating hours and including weekends is intended to create conditions for seamless settlement of cross-border payments and support the functioning of tokenized assets outside standard banking hours.

The development of capital markets within the special Digital Securities Sandbox regulatory environment also fits into this strategy. In July 2026, the central bank approved the participation of the HSBC Orion platform, which is designed for the issuance of digital bonds and work with tokenized securities. The platform will also be used to test the planned Digital Gilt Instrument, which represents an experimental form of government securities on the blockchain.

Seeking a balance between innovation and systemic stability

The combination of legislative adjustments, modernization of traditional settlement infrastructure and practical testing shows that the United Kingdom is seeking to create a complementary financial ecosystem. Within it, commercial bank money, regulated stablecoins, a state digital pound and tokenized capital instruments should be able to coexist safely alongside one another. The success of this approach will depend primarily on whether British authorities manage to maintain a balance between supporting technological innovation and protecting monetary stability.

This article is for informational purposes only and does not constitute investment, legal or other professional advice, an offer or a recommendation to purchase, sell or hold crypto-assets. The information contained in the article is based on publicly available sources and describes the current state of development and regulatory proposals in the United Kingdom. Regulatory proposals, tested solutions and planned measures may change and may not be implemented in the form presented.