UK banks have executed the first live customer transactions using tokenised sterling deposits, completing a set of pilots that UK Finance describes as a major milestone for payments innovation in the UK.
The tests — part of the Great British Tokenised Deposit (GBTD) initiative — saw seven banks carry out real transactions using digital representations of commercial bank money, moving the project from theory into operational reality.
The participating institutions — Barclays, HSBC UK, Lloyds Banking Group, Monzo, Nationwide, NatWest and Santander — completed two remortgage transactions in which deposit funds were locked and automatically released at completion. UK Finance said this reduced manual checks and settlement delays, and could allow customers to continue earning interest on funds until the moment of completion. The pilots also explored how digital connectivity with HM Land Registry could streamline future property transactions.
A second pilot tested a consumer marketplace purchase, where programmable tokenised deposits allowed money to be locked in the buyer’s account and released only once goods were successfully exchanged. UK Finance said this mechanism helped reduce transaction risk and build trust in online commerce by linking payment directly to fulfilment.
The transactions were executed on the GBTD platform developed by Quant, providing shared industry infrastructure for tokenised commercial bank money. UK Finance said the pilots demonstrate how tokenised deposits can make payments more transparent, programmable and efficient, offering benefits such as reduced fraud, greater customer control over funds and faster settlement.
Jana Mackintosh, managing director of payments and innovation at UK Finance, said the pilots show how tokenised deposits can deliver “practical, real‑world benefits” and strengthen the UK’s payments infrastructure while supporting innovation across the economy.
The initiative complements ongoing work by the Bank of England, HM Treasury, the Financial Conduct Authority and the Payment Systems Regulator on the future of retail payments. As more transactions become digital, UK Finance said there is a growing need for money that can operate seamlessly in digital environments — with tokenised deposits offering a regulated, bank‑issued alternative to privately issued digital tokens.
The pilots will continue, with further tests planned to link tokenised customer money to digital asset settlement.
An in‑depth analysis of the GBTD framework — including its operating model, governance structure and implications for institutional adoption — appears in the latest issue of Capital Pioneer magazine.
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