Bank of England pilots SME credit data using digital pound and stablecoins for cross-border trade finance.

The Bank of England has launched the second phase of its Digital Pound Lab, involving NOBO Finance, Dun & Bradstreet, and Polygon Labs to test how stablecoins and a potential digital pound can improve cross-border trade finance for SMEs. The project aims to address financing challenges caused by slow settlements and limited credit access by creating portable financial identities and enabling faster digital settlements. Two main workstreams focus on developing reusable credit profiles for SMEs and exploring invoice factoring with multi-rail settlement using stablecoins and digital pounds. This initiative seeks to enhance trust, visibility, and efficiency in SME trade finance without replacing stablecoins, promoting interoperability between public and private digital money.