Tokenised Deposit Trials
Major UK banks successfully complete their first interbank transactions using tokenised sterling deposits.
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Key Points
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The trials ran on the GBTD platform, which Quant developed as shared UK industry infrastructure for tokenised commercial bank money.
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The online-marketplace transaction was simulated: no real goods changed hands, even though the test modelled releasing funds to the seller after receipt was confirmed.
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The Bank of England has expressed a preference for banks to develop tokenised deposits rather than stablecoins; Reuters reported concerns that stablecoins could draw money out of the banking system, affecting credit costs and monetary sovereignty.
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The initiative brings together seven banks—Barclays, HSBC UK, Lloyds Banking Group, Monzo, Nationwide, NatWest and Santander—with Quant, EY and Linklaters also supporting the work.
Seven UK banks have completed the world's first interbank transactions using tokenised sterling deposits, marking a major shift toward blockchain-based money that works across different banks UK Finance. Lloyds, NatWest and Barclays tested two remortgage payments, while HSBC and other lenders trialled a simulated marketplace purchase where funds moved automatically once conditions were met Ledger Insights. Unlike private stablecoins, tokenised deposits keep all the legal protections of ordinary bank deposits.
The trials used a shared platform called GBTD that Quant built as industry infrastructure for tokenised commercial bank money Disruption Banking. The Bank of England backs this approach over private stablecoins, fearing those could drain money from the banking system and hurt credit availability Reuters. Banks now plan to issue three digital bonds settled with tokenised deposits in early 2027.
How Tokenised Money Actually Moved Between Banks
The trials tested two real scenarios. First, Lloyds, NatWest and Barclays moved funds for remortgage payments using the GBTD platform Scottish Financial News. The system locked money on-chain and automatically released it once property transfer conditions were confirmed, cutting out delay and manual checks.
Second, HSBC and partner banks simulated an online marketplace purchase where the buyer's money sat in escrow Yahoo Finance. Once the seller confirmed receipt, the system automatically transferred the funds. No real goods changed hands, but the test proved money can move without human intervention.
Why Central Banks Prefer This Over Private Stablecoins
The Bank of England actively pushed UK banks toward tokenised deposits instead of private digital currencies like USDT Reuters. Regulators worry that stablecoins backed by private companies or foreign currencies drain money out of banks, raising borrowing costs and threatening the UK's control over its own money supply.
Tokenised deposits solve this problem because they stay inside the banking system UK Finance. Banks issue them, regulators oversee them, and they carry the same legal protections as regular deposits. The money never leaves the commercial banking network.
A Blueprint for Faster Property Deals and Cheaper Payments
Corporate treasurers are excited about tokenised deposits because they speed up settlement and cut risk Disruption Banking. In property transactions, funds can move instantly once conditions are met, eliminating the traditional three-to-five day delay. Interest keeps accruing right up to settlement, saving money.
The trials involved seven banks—Barclays, HSBC, Lloyds, Monzo, Nationwide, NatWest and Santander—plus technology firm Quant and advisers EY and Linklaters Ledger Insights. The next phase will link tokenised deposits with digital assets and wholesale markets. Three digital bonds will settle on the system in the first quarter of 2027.
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