Seven of the UK’s largest banks have completed the first live interbank customer transactions using tokenized sterling deposits on shared blockchain-based infrastructure, industry body UK Finance announced on September 24. The milestone moved regulated commercial bank money onto common rails for the first time in a live customer setting.
The Great British Tokenised Deposit initiative includes Barclays, HSBC UK, Lloyds Banking Group, Monzo, Nationwide, NatWest and Santander. The platform was built by Quant, with EY providing project management and Linklaters developing legal advice and rulebooks.
Tokenized deposits are not stablecoins or a Bank of England digital pound. They are digital representations of money already held as commercial bank deposits, retaining legal and regulatory protections while adding blockchain-style programmability and faster settlement.
In live tests, Lloyds, NatWest and Barclays executed two remortgage completions, where deposit funds were locked and automatically released once each property transfer was confirmed. A separate group including HSBC ran a customer-to-customer payment simulating an online marketplace purchase, holding buyer funds until goods were confirmed delivered. UK Finance said digital-asset settlement will also be tested over coming months.
“These live transactions show how tokenised deposits can deliver practical, real-world benefits and contingent payments that give customers greater control over their money,” said Jana Mackintosh, UK Finance’s managing director of payments and innovation.
The Bank of England has encouraged the approach as a safer alternative to private stablecoins because the money stays inside the regulated banking system. Lucy Rigby KC MP, Economic Secretary to the Treasury, called the transactions “a critical milestone for payments innovation in the UK.”
Looking ahead, participants plan to establish a dedicated company and governance rulebook, and to issue three digital bonds in the first quarter of 2027 that can be traded and settled using tokenized deposits. Further pilots will link tokenized customer money with digital assets for seamless exchange.
