UK Banks Complete First Interbank Tokenized Deposit

Seven of the UK's largest banks completed the world's first interbank transactions using tokenized British pound deposits in September 2026. The live customer transactions were conducted on a shared platform built by Quant as part of the Great British Tokenised Deposit (GBTD) initiative convened by UK Finance.

Barclays, HSBC, Lloyds Banking Group, Monzo, Nationwide, NatWest and Santander all took part. The milestone demonstrates how regulated digital bank money can enable faster, programmable payments while maintaining standard deposit protections. It signals a shift in UK financial infrastructure.

How tokenized deposits worked in live retail and mortgage tests

The trials tested whether regulated bank money could move between institutions to support real payments. They included remortgage completions and a consumer marketplace purchase.

In the mortgage tests, Lloyds, NatWest and Barclays completed two live remortgage transactions. Tokenized deposit funds were locked and automatically released upon property completion. This reduced manual checks and settlement delays.

HSBC conducted a separate test simulating an online marketplace purchase from a private seller. Programmable tokenized deposits locked the buyer's funds, releasing them only after successful exchange of goods. Quant Network provided the technology for this test. The mechanism helped reduce transaction risk.

The interbank transactions proved tokenized deposits from different banks can move across separate blockchain systems and settle payments automatically.

Tokenized deposits vs stablecoins: regulated bank money with blockchain features

Tokenized deposits are distinct from private stablecoins like USDT or USDC. They are digital representations of money already held in a commercial bank account.

Unlike stablecoins, tokenized deposits remain a direct liability of the issuing bank. They retain all the protections attached to conventional deposits. In essence, they are normal bank deposits turned into digital tokens on a blockchain. They use the same bank money but add programmable, blockchain-based features.

The Bank of England is pushing to keep digital money within the regulated banking system. This initiative aligns with that goal.

Next steps: pilots, digital bonds and broader financial infrastructure goals

Participants plan further pilots in the coming months. These will demonstrate digital asset settlement by linking tokenized customer money with digital assets.

The group will next test using the system for settling digital assets. UK Finance said banks are planning to issue three tokenised digital bonds in early 2027. These bonds will use the same tokenised deposit system for trading, clearing and settlement.

The project aims to reduce fraud and improve efficiency in processes like mortgages. It supports broader UK digital-finance infrastructure goals, including work on stablecoins and digital settlement.

Jana Mackintosh of UK Finance said: "These live transactions show how tokenized deposits can deliver practical, real-world benefits, contingent payments that give customers greater control over their money."

The GBTD project will now move beyond the pilot phase. It will form a dedicated company, rulebook and governance framework.