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Polygon Labs, a US-based blockchain payments firm, is taking part in Phase 2 of the Bank of England’s Digital Pound Lab. The project explores potential capabilities for a digital pound and cross-border stablecoin settlement. The firm is conducting this work in partnership with NOBO Finance and Dun & Bradstreet. Polygon says it has been selected to examine “if a stablecoin and a digital pound can settle the same cross-border payment, in the same flow, without either side waiting on the other”. The consortium is one of 12 industry participants selected for Phase 2. Such collaboration reflects a growing trend where blockchain firms seek to integrate their infrastructure with proposed central bank digital currencies.
The Lab conducted its first phase, known as the “Operation Stage,” between August and November 2025. During this window, the Bank of England tested a limited number of use cases. The goal was to understand “whether and how a digital pound could improve existing payment services,” according to the official documentation. The Bank of England emphasises that the Lab is not a regulatory sandbox and does not involve real customers or real money payments. This environment allows for safe experimentation without the immediate pressures of regulatory compliance or consumer protection requirements found in live market testing.
The initial phase provided necessary data. These results allowed the Lab to move forward with more complex experiments. Having established a baseline in the first phase, the current stage allows participants to explore more sophisticated interactions between different payment systems.
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Cross-Border Payment Experiments
Polygon is leveraging its experience having settled over $2.6 trillion in stablecoin transactions to date. In the context of the Digital Pound Lab, the firm is handling the stablecoin settlement component and the underlying smart contract infrastructure. This technical capability is delivered through its Open Money Stack’s orchestration layer. Conversely, the digital pound segment settles within the Lab’s simulated environment, creating a distinct separation between the legacy system simulation and the new blockchain integration.
In a related test led by NOBO Finance, the consortium is developing a reusable SME credit profile. This profile combines transaction data with Dun & Bradstreet’s verified business identity and credit data. These elements are further integrated with Polygon-based smart contract infrastructure to create a dynamic and verifiable record for small and medium-sized enterprises.
For Polygon, the initiative provides an opportunity to “experiment with how our own infrastructure handles digital pound mechanics without the cost, risk, or regulatory runway of a live pilot”. This enables the firm to refine its technology in a theoretical setting before any potential real-world application. Additional information about the UK’s digital pound project is available through a video interview with Diana Carrasco Vime, head of the Digital Pound Project at the Bank of England.
