Digital Pound Lab

What is the Digital Pound Lab?

The Digital Pound Lab (the Lab) is an experimental platform which enables hands-on experimentation for industry and the Bank. The Lab provides a simulated environment to test the potential capabilities of a digital pound, helping explore the feasibility of different use cases. However, it is not a regulatory sandbox and no real customers or real money payments will be involved.

Its aims are:

• co-creating use cases: collaborating with industry to test use cases that will contribute to the assessment of whether to build a digital pound;
• understanding business models: collaborating with industry to understand potential business models for Payment Interface Providers (PIPs) and External Service Interface Providers (ESIPs);
• supporting innovation: assessing the requirements for a digital pound to provide a platform for innovation; and
• informing the Bank's emerging thinking: contributing to the Bank's emerging thinking on digital pound technology and digital currency technology more generally.

What does participation in the Lab involve?

The Lab offers organisations a unique opportunity to experiment and develop potential digital pound products and services using the Lab capabilities and infrastructure, such as APIs, wallets, and smart contract functionality (more details on the capabilities are below). Participants will develop their use cases within three months of joining the Lab. During this time, they will test their solutions and share insights to help enhance the Lab's functionalities.

Participants will develop their solutions as proofs of concept or prototypes in their own development environments, using their preferred programming languages and tools. They will do this while interacting with the Lab's technical capabilities, such as APIs, wallets, and smart contract functionality. Participants will have the option of creating their own PIPs and wallet applications or using our sample PIPs which might help to jump start their creation of use cases.

Participation is voluntary and unremunerated, but organisations gain the opportunity to collaborate with the Bank and industry peers, experiment with cutting-edge technology, and help shape thinking on the future of UK payments. Throughout their engagement, participants will have the chance to showcase their solutions to the Bank. At the end of the Lab, they will also present their solutions at a final industry showcase event, and their use cases may also be featured in published reports.

What are the key timelines and processes?

The Lab is expected to run from August 2025 to July 2026. There will be two phases. Table 1, below, sets them out.

Phase 2 applications are currently open, with onboarding to the Lab occurring on a rolling basis. We encourage early applications to ensure you secure your spot.

Table 1: Phases of the Lab

We will be hosting a showcase event to demonstrate some of the Lab’s capabilities, as well as the use cases built during Phase 1, on Thursday 15 January 2026. To register your interest in attending, please complete the registration form.

Phase 1 participants

During Phase 1 participants were invited to test a small number of use cases across; point of sale, tiered wallets, micro merchants, conditional business-to-business payments, omni-channel payments and temporary tourist wallets. Details of the participants in Phase 1, and the use cases they tested, are below:

• Fluxpay Limited explored point-of-sale digital-pound transactions using both alias-based payments and QR codes, tiered wallets and tourist wallets. They developed a proof-of-concept digital wallet platform with tiered know your customer (KYC) features and a link to a simulated foreign exchange service for cross-border transactions.
• LINK, in collaboration with Consult Hyperion, focused on cashback at point of sale. Their solution uses the LINK messaging network to demonstrate point of sale payments and cash withdrawals (cashback with and without purchase) through digital pound wallets.
• NOBO Finance, in collaboration with Applied Blockchain, explored conditional business-to-business payments. Their solution demonstrates how cross-border trade finance could be streamlined and made more accessible for small and medium-sized enterprises, leveraging Applied Blockchain’s Silent Data technology and the locking features available in the Lab.
• Yotra Limited explored omni-channel payments, tiered wallets, and tourist wallets. Their solution is a transport payment platform designed from the perspective of transport operators, residents, and visitors, enabling a frictionless payment experience across travel networks.

The main components of the Lab are an application programming interface (API) platform and demonstration ledger, a management portal, sample applications, and a smart contract platform, which is separate to the core functionalities.

API platform and demonstration ledger

The API platform exposes a set of APIs that allow access to the core functionalities of the Lab. Those functionalities are held on a demonstration ledger, built on a relational database management system (ie not blockchain). No decision has been made on whether distributed ledger technology (DLT) based components would form part of a digital pound design. In the Lab, we intend to focus on testing the interoperability between centralised and DLT systems (see ‘Smart contract platform’ below).

Management portal

The management portal is where participants can check documentation, frequently asked questions, usage statistics and errors, or make feature and service requests.

Sample applications

The sample applications enable the Bank to demonstrate the capabilities of the Lab to participants and the wider industry and might help jump-start participants to create their use cases.

The sample applications include:

• two sample PIPs and wallet applications
• a mock e-commerce website to demonstrate various checkout experiences
• a chat application to demonstrate how users might connect their wallets to third-party applications while maintaining user privacy and security to make and co-ordinate payments

Participants will have two routes of entry into the Lab:

1. Creating their own PIPs and wallets
2. Using our sample PIPs and wallets. This will support participants who are interested in building their use cases but would prefer to integrate an existing wallet to avoid having to build basic functionalities, like log-in and balance display screens. These sample applications will be extended throughout the operation of the Lab.

However, if there is functionality required to support a use case, that doesn’t already exist in the sample PIP and sample wallets, participants will be required to build their own PIP and wallet to support their use case.

Smart contract platform

The smart contract platform communicates with the core functionalities of the Lab through the sample PIPs and enables the creation and execution of smart contracts. Participants can also connect their own PIPs to the smart contract platform if preferred. It has an access provider component which allows participants read and write access to the smart contract platform, so they do not have to host the logic themselves. 

The demonstration digital pounds in the Lab are held on the demonstration ledger, not the smart contract platform. There will be functionality that allows the swapping of items on the smart contract platform for digital pounds, helping test opportunities for interoperability between blockchain and non-blockchain systems.

The smart contract platform is built using Hyperledger Besu and provides a secure environment for participants to test interoperability of the digital pound with digital assets and programmable ledgers.