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UK Finance has revealed the initiation of a pilot program for tokenized deposits in pounds sterling, during which actual test transactions of this new format will be conducted until mid-2026.
In collaboration with the largest banks in the U.K., UK Finance has launched an extensive pilot initiative to implement tokenized pound deposits (GBTD), a digital variant of commercial bank money. This type of deposit maintains the trustworthiness and regulatory assurances of conventional deposits while offering new advantages — quicker payments, diminished fraud, and enhanced transaction transparency.
UK Finance is a British trade organization that represents over 300 banking and financial institutions in the U.K.
The initiative includes participation from Barclays, HSBC, Lloyds Banking Group, NatWest, Nationwide, and Santander, with support from Quant, EY, and Linklaters. The pilot will extend until mid-2026 and will focus on three primary areas:
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- P2P payments in online marketplaces — emphasizing the protection of both buyers and sellers;
- mortgage refinancing — aimed at accelerating transactions and mitigating real estate fraud;
- digital asset settlements — designed to facilitate exchanges between tokenized money and digital assets.
As stated in the press release, the new platform will establish a foundation for smart payments and will be fully compatible with other digital money forms and existing payment systems. Additionally, participants will have access to a Tokenization-as-a-Service solution, enabling organizations without their own infrastructure to engage with the project.
Bank representatives highlight the strategic significance of moving towards tokenized deposits. Ryan Hayward, Head of Digital Assets at Barclays, emphasized that transitioning deposits to a digital format will maintain the central role of commercial bank money within the economy. Meanwhile, John O’Neill from HSBC referred to the project as a crucial advancement in the evolution of digital money.
UK Finance asserts that the pilot project will showcase tangible advantages for customers and businesses — enhanced user control over payments, dependable fraud protection, and more efficient settlements. Furthermore, the initiative is pivotal to the national strategy for financial innovation, which includes efforts to issue digital government bonds (DIGIT) and implement the National Payments Vision (NPV).
In 2024, as part of UK Finance, the largest banks in the U.K., along with FinTech companies and payment networks Visa and Mastercard, participated in testing the Regulated Liability Network (RLN), a technology designed for tracking and transferring tokenized debt obligations that can be issued by various financial institutions.
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