The Bank of England is running a pilot in its Digital Pound Lab to test how sharing small business credit data could improve access to financing and speed up payments. The trial brings together NOBO, Polygon Labs, and Dun & Bradstreet, and could reshape how SMEs get credit and settle transactions.
What the pilot involves
The Digital Pound Lab is the Bank's sandbox for exploring a potential central bank digital currency. In this pilot, the Bank is working with three partners: NOBO, Polygon Labs, and Dun & Bradstreet. Each brings a different piece of the puzzle. NOBO and Polygon Labs are technology firms, while Dun & Bradstreet is a data analytics company. The goal is to see how credit data could be shared securely and efficiently within a digital pound system.
The Bank has not detailed the specific roles of each partner, but the pilot is designed to test how credit data could be used in a digital currency environment. It's part of the Bank's broader exploration of a digital pound, which would be a central bank digital currency for the UK.
Why credit data matters
For small businesses, access to credit often depends on how well lenders can assess risk. If credit data is shared more effectively, lenders could make faster and more accurate decisions. That could mean better terms for SMEs, which often struggle to get loans. The pilot aims to see if a digital pound could facilitate that data sharing.
The trial could enhance credit access for SMEs, according to the Bank. That's a big deal for small firms that rely on loans to grow but frequently hit barriers when traditional credit checks don't capture their full picture. Better data flow could open doors that have been closed.
Faster settlements, wider trade
Settlement speed is another focus. If payments settle faster, SMEs could manage cash flow more easily. The trial could also have implications for cross-border trade. Faster, more transparent transactions could make it easier for small businesses to buy and sell internationally. The Bank has said the trial could potentially transform cross-border trade dynamics.
That's not just about speed. It's about trust. When a small company in Manchester sends goods to a buyer in Berlin, both sides want certainty that payment will arrive. A digital pound with embedded credit data could provide that assurance, reducing friction in trade that often feels slow and risky.
The pilot is ongoing. The Bank has not announced a timeline for results or a decision on whether to proceed with a digital pound. The findings will likely inform future policy. For now, the focus is on whether the technology and data sharing can work in practice. The Bank of England has not disclosed when the pilot will end or what metrics it will use to judge success.
