UK’s largest banks complete world’s first interbank transactions using tokenized deposits
Seven major U.K. banks completed a trial moving tokenized British pound deposits between institutions on a shared platform built by Quant, executing customer-facing transactions including remortgage payments and a consumer purchase. The exercise tested whether regulated bank money in tokenized form can support interbank transfers and retail payments while remaining liabilities of the issuing banks.
Why It Matters
The trial extends tokenized bank money beyond single-institution pilots, demonstrating interoperable movement of regulated deposits across multiple banks — a development regulators including the Bank of England and FCA are preparing the financial system to accommodate. Successful interbank tokenized settlements could reshape payment speeds, cash-flow management and how digital assets are settled using customer money.
Key Facts
- Participating banks: Barclays, HSBC, Lloyds Banking Group, Monzo, Nationwide, NatWest and Santander
- Platform provider: Quant (distributed ledger technology service provider)
- Transaction types tested: Remortgage payments and a consumer purchase on a shared platform
- Status of tokenized deposits: Remain liabilities of the issuing bank and retain conventional deposit protections
- Next planned test: Settlement of digital assets using tokenized customer money
Seven of the U.K.'s largest banks carried out a live trial that used tokenized British pound deposits to complete customer transactions on a common platform developed by Quant. The experiment included remortgage payments and a marketplace payment by a consumer, marking a step beyond pilots that kept tokenized bank money within a single institution. Organisers say the exercise was designed to test whether regulated bank deposits, when tokenized, can move between banks and be used for retail payments.
Unlike stablecoins, the tokenized deposits in the trial remained legal liabilities of the banks that issued them and continued to carry the same deposit protections as ordinary bank balances. Participants and spokespeople framed the tests as exploring practical benefits such as faster settlement, improved cash-flow management for businesses, and more transparent or convenient payment flows for customers.
The project involved Barclays, HSBC, Lloyds Banking Group, Monzo, Nationwide, NatWest and Santander. According to the announcement, the group will progress to trials focused on using tokenized customer money to settle digital assets. The work aligns with preparatory efforts by the Bank of England and the Financial Conduct Authority to ready the U.K. financial system for broader tokenization and extended settlement hours, while regulators weigh how to support tokenized markets and institutional use of stablecoins.
Government and industry figures commented on the trial’s implications. Lucy Rigby, economic secretary to the Treasury, said the live transactions demonstrate how tokenized deposits can provide conditional payments that give customers more control. Gilbert Verdian, founder and CEO of Quant, described tokenized deposits as potentially influential in the evolution of digital money and payments in the U.K. and beyond.
Keep Reading
