UK’s Biggest Banks Complete First Interbank Payments Using Tokenized Deposits

Seven of the UK’s largest banks have completed what they call the world’s first live customer transactions using tokenized British pound deposits on a shared platform. The transactions included remortgage payments and a test of a consumer purchase. Barclays, HSBC, Lloyds Banking Group, Monzo, Nationwide, NatWest and Santander took part in the Great British Tokenized Deposit initiative, using a platform built by distributed ledger provider Quant. The banks announced the results on Thursday.

Interbank Tokenized Deposit Transactions

The project tests whether regulated bank money can move in tokenized form between institutions and in retail payments. That sets it apart from a recent Lloyds effort to buy a tokenized gilt with tokenized deposits, which stayed within its own arrangement. The group will next test settling digital assets with tokenized customer money.

Regulators and Digital Money in the UK

The trial arrives as the Bank of England and the Financial Conduct Authority prepare the financial system for tokenization and longer settlement hours. Regulators want to support tokenized markets while also weighing stablecoins for institutional settlement.

Benefits for Businesses and Customers

Lucy Rigby, economic secretary to the Treasury, said the live transactions show practical benefits, including contingent payments that give customers more control over their money. Tokenized deposits could speed up settlement, improve cash-flow management and make payments more convenient, transparent and secure. Gilbert Verdian, founder and CEO of Quant, said they could play a key role in the future of digital money and payments in the UK and beyond.

How Tokenized Deposits Differ From Stablecoins

Tokenized deposits are digital records of money already held in a bank account. Unlike stablecoins, they remain a liability of the issuing bank and keep the protections of conventional deposits.