Some of Britain’s largest banks have completed what industry group UK Finance describes as the world’s first interbank transactions using tokenised deposits, proving that blockchain-based commercial bank money can move between separate banking institutions rather than remaining confined to individual systems.
Lloyds, NatWest and Barclays completed two mortgage transactions using tokenised deposits, while another group including HSBC carried out a person-to-person transaction simulating an online marketplace purchase. The tests are part of the Great British Tokenised Deposit, or GBTD, project, which also involves Nationwide and Santander. Quant provides the underlying programmable-money infrastructure, with EY and Linklaters supporting the initiative.
The key breakthrough is interoperability. Previous tokenised-deposit systems largely operated within single banks. This initiative tested whether digital representations of conventional bank deposits can work across banks while retaining the legal and regulatory characteristics of commercial bank money.
The experiments also highlighted programmability. In the simulated marketplace purchase, money was reserved in the buyer’s account and programmed to be released to the seller only after goods were received. In the remortgage transactions, funds could remain locked until property settlement was completed and then be released automatically, potentially reducing intermediaries and manual processes.
Tokenised deposits differ from most stablecoins because they represent existing commercial bank deposits rather than separate tokens backed by reserve portfolios. Customers keep a claim against their bank while gaining blockchain-based capabilities. The Bank of England has encouraged this approach while taking a more cautious stance toward systemic stablecoins.
UK Finance plans to establish a dedicated company and develop a rulebook and governance framework to move the system from pilot testing toward production. Participating banks also plan to issue three digital bonds during the first quarter of 2027 that can be traded and settled using tokenised deposits. The UK is not alone: The Clearing House announced a similar US initiative, and the BIS-led Project Agorá is exploring tokenised commercial bank money alongside tokenised central-bank money.
