Digital Pound Lab

The Digital Pound Lab is an experimental platform for industry to test use cases and assess the viability of potential business models for a digital pound.

What is the Digital Pound Lab?

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

The Lab has the following aims:

  • Co-creating use cases: Collaborating with industry to test use cases that will contribute towards the assessment of whether to proceed to build a digital pound.
  • Assessing business models: Collaborating with industry to assess the viability of potential business models for Payment Interface Providers (PIPs) and External Service Interface Providers (ESIPs).
  • Supporting innovation: Assessing the requirements necessary for a digital pound to provide a platform for innovation.
  • Informing the Bank’s emerging thinking: Contributing to the Bank’s emerging thinking on digital pound technology and digital currency technology more generally.

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 out both.

Table 1: Phases of the Lab

Phase

Purpose

Activities

Duration

Application period

Number of Participants

Phase 1

This phase will test a small number of use cases, aiming to understand whether and how a digital pound could improve existing payment services

Participants will design and build use cases which have been defined by the Bank

Three months (approx. August 2025 to October 2025)

Applications open April 10, 2025, to June 6, 2025

Up to six

Phase 2

This phase will prioritise innovative use cases that demonstrate payment services that do not currently exist. However, use cases that demonstrate existing payments will also be accepted

Participants will design and build use cases that they define

Nine months (approx. October 2025 to July 2026)

Ongoing basis from July 2025 to March 2026

Up to 10 per month

Who can apply to participate?

Applications are open to all private and public sector companies and organisations from technology, payments, banking, retail and other relevant sectors that are interested in hands-on experimentation with digital pound use cases. Due to limited space and specific project development needs, we expect that we may not be able to accept all applications. Firms may apply for both phases.

See the Terms of Participation and details on how to apply as well as the criteria on which applications will be assessed.

We are hosting a webinar on 23 April at 1.30pm to 2.30pm (BST) to answer any questions you may have on integrating with the Lab infrastructure. Please register your interest.

How is the Lab designed?

The Lab is based on the platform model of a digital pound described in the Consultation Paper, where the central bank provides the infrastructure that PIPs can access to provide services to users. ESIPs are also able to provide value-add services to users.

Although based on the platform model, the design of the Lab does not indicate the final design choices for a production digital pound. Instead, it helps test different technology and functional propositions. It will also help us assess the requirements for a platform for innovation by demonstrating which components or functionality support innovative use cases, and whether there are others that would need to be added or removed.

Figure 1: Diagram showing the design of the Lab

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.

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 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 the following:

  • 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: creating their own PIPs and wallets or using our sample PIPs. 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 wallet 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 sits beside the API platform and enables the creation and execution of smart contracts. 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 provided as a secure environment for Participants to test interoperability of the digital pound with digital assets and programmable ledgers.

  • API Platform

    Capability

    Description

    Payments
    • Omnichannel payments across points of sale, e-commerce, API-based and other emerging forms of payments
    • QR and NFC-based payment initiation
    • Making requests to pay, including refunds
    • Split payments

    Account management

    • Opening an account
    • Creating, looking up or deleting aliases
    • Looking up balances (both available and total)

    Conditional payments
    • Enabling users to authorise a third-party to spend up to a certain amount within a specified time frame (similar to the allowance and approval concept in an ERC20 contract)
    • Enabling users to put money aside in conditional ‘locks’, including:
      • allowing the receiver to draw down funds up to a date and amount specified by the sender
      • allowing funds to be drawn down based on the decision of a third party 
      • allowing funds to be transferred if a cryptographic hash is provided within a specified timeframe

    ESIP connections
    • Allowing users to connect their wallets to, and make payments from, third-party applications

    Trusted credentials (optional use)
    • Supporting confirmation of payee and payee authentication, including the use of digital signatures
    • Allowing the authentication of users through third-party applications (or ESIPs)
    • Supporting payment tokens for use in autonomous payments

    Security and privacy

    • Enabling one-time wallet addresses and privacy-enhancing technologies

    Smart contract platform

    Capability

    Description

    Smart contract functionality
    • Creating and executing smart contracts
    • Atomic swap functionality items, such as digital assets, for digital pounds held on the demonstration ledger

    Block explorer
    • The ability to view transactions that have occurred on the smart contract platform

    In addition to the features mentioned above, we may implement regular feature updates based on feedback from Participants. We will keep this page updated with any new features implemented.

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This page was last updated 11 April 2025