UK Banks Complete Live Tokenised Deposit Customer Transactions

Tokenised deposits are digital representations of traditional commercial bank money. They retain the trust and regulatory protections of conventional deposits while offering benefits such as programmability, speed and efficiency.

The transactions were delivered through the Great British Tokenised Deposit (GBTD) initiative, which was convened by UK Finance and involves Barclays, HSBC UK, Lloyds Banking Group, Monzo, Nationwide, NatWest and Santander.

GBTD participants executed the first set of live retail transactions, which included:

Two remortgage completions:

• Deposit funds were ‘locked’ and then automatically released at completion, reducing manual checks and settlement delays. For mortgage transactions, the technology can also ensure customers continue to earn interest on funds held in their accounts until completion.
• The pilots also explored how connecting with HM Land Registry digitally could help to improve the efficiency of future transactions.

A consumer ‘marketplace’ transaction: 

• A consumer purchasing an item from a private seller. The programmable tokenised deposits enabled money to be ‘locked’ in the buyer’s account, with release only happening when the goods were successfully exchanged, helping reduce transaction risk and building greater trust in online commerce.

Why tokenised deposits?

These transactions demonstrated how tokenised commercial bank money can make payments more transparent, programmable, and efficient. Once scaled, the pilots demonstrated the potential benefits to customers including reduced fraud, giving customers greater control over funds, and increased confidence for buyers and sellers. 

The transactions were executed on the GBTD platform, which was developed by Quant as a shared UK industry infrastructure for tokenised commercial bank money. Complementing the work of the Bank of England, HM Treasury, the Financial Conduct Authority and the Payment Systems Regulator on the future of retail payments, the pilots demonstrate how UK banks are starting to innovate with tokenised deposits, enabling innovation while maintaining the safety, resilience and trust associated with commercial bank money.

As more transactions and services become digital, there is a growing need for money that can operate seamlessly in digital environments. Tokenised deposits provide a way to bring trusted commercial bank money onto digital networks, enabling payments to move faster, settle more efficiently and be programmed to execute automatically when specific conditions are met. This capability could support a range of future uses, from faster home purchases and safer online payments to the buying and selling of digital assets and more efficient settlement of financial transactions.

Further pilots are expected over the next few months to demonstrate digital-asset settlement by linking tokenised customer money with digital assets for seamless exchange. Banks involved in the project will issue digital debt instruments that can be traded and settled, with coupons paid in tokenised deposits, unlocking the benefits of delivery-versus-payment-versus-reserves (DvPvR).

Jana Mackintosh, Managing Director of Payments and Innovation at UK Finance said: 

These live transactions show how tokenised deposits can deliver practical, real-world benefits, contingent payments that give customers greater control over their money. By bringing the industry together, GBTD is demonstrating how tokenised deposits can strengthen the UK’s payments infrastructure, support innovation across the economy and drive the UK’s competitiveness internationally.

Economic Secretary to the Treasury, Rt Hon Lucy Rigby KC MP, said: 

These first live transactions mark a critical milestone for payments innovation in the UK. We are a world leader in digital finance, and this Government is determined to keep us at the forefront. We will continue working with industry and regulators to build a safer, more innovative payments ecosystem that works better for customers and supports growth.

Chris Woolard, UK Digital Markets Champion said: 

As noted in my first report to the Chancellor in July, GBTD is an exceptionally important initiative to the UK, so it is great to see the level of progress being made, as part of moving the uk to a multi-money, multi-asset system.

Ryan Hayward, MD, Digital Assets at Barclays said: 

The successful completion of these transactions marks a significant step in demonstrating the real-world potential of tokenised deposits in the UK. Moving from testing into live transactions shows how tokenised deposits could help make payments more efficient, help reduce friction in processes such as remortgaging and support better experiences for customers and businesses, while maintaining the trust, security and stability of commercial bank money.

Gavin MacLean, UK Head of Global Payment Solutions at HSBC UK, said:

For businesses and customers, tokenised deposits could enable quicker settlement, improve cash-flow management and provide more convenient, transparent and secure ways to pay, while retaining the trust and stability of commercial banks. By bringing together banks, businesses and policymakers, the initiative can strengthen the UK’s digital payments infrastructure, encourage innovation and support economic growth and competitiveness. At HSBC UK, we are proud to support this important initiative and help build a trusted, innovative payments ecosystem that delivers greater choice for customers.

Peter Left, Head of Digital Assets at Lloyds Banking Group said: 

Innovation works best when the industry moves together. These pilots have shown how tokenised deposits can deliver real-world benefits and highlight the role Lloyds, and other UK banks, can play in supporting innovation and the growth of digital finance in the UK.

Ben Ashwell, Payments Director, Nationwide said: 

This is an important step forward for Great British Tokenised Deposits. Nationwide is pleased to be working alongside industry partners to explore how tokenised commercial bank money can deliver better outcomes for customers, businesses and the wider UK economy.

Mark Brant, Chief Payments Officer at NatWest Group, said: 

NatWest is proud to have played a role in delivering the first live customer transactions – and this is only the beginning. This milestone demonstrates how programmable money can give customers greater control over how and when payments are made, while enhancing transparency, trust and efficiency. By linking payments to real-world conditions, tokenised deposits have the potential to unlock new benefits for both retail and institutional customers. We’re excited to continue working with industry partners to help shape the future of payments and bring these benefits to customers at scale.

Paul Horlock, Chief Payments Officer, Santander said: 

Tokenised deposits have the potential to play a key role in the evolution of digital money and payments in the UK and beyond. We believe this can enable and accelerate innovation within UK payments. This is a great example of industry collaboration with the opportunity for multiple future applications and use cases for our customers and benefit to the UK economy.

Gilbert Verdian, Founder and CEO, Quant said: 

These transactions are real money moving on UK infrastructure, not an experiment. Remortgage and P2P marketplace payments completing automatically the moment conditions are met is proof that programmable, conditional payments can solve challenges the market actually has – from failed completions to authorised push payment fraud.

Richard Hay, Partner and Global Co-Head of Fintech at Linklaters said: 

These transactions showed how tokenised deposits can make payments more transparent, programmable, and efficient. Benefits include potential fraud reduction, giving customers greater control, and enhancing buyers and seller confidence. We are delighted once again to have advised on a major milstone for payments innovation in the UK.

Mike Zehetmayr, Partner, Technology Capital Markets Leader, EY said: 

The completion of five years of collaboration across market participants, central banks, regulators and supervisors, culminating in successful real-world pilot transactions, has laid the foundations for an operational GBTD service. This achievement demonstrates the UK’s continued leadership in financial innovation and helps define the infrastructure underpinning the future digital asset financial system.

Muneeb Shah, Partner, Digital Asset Technology Consulting, EY said: 

The completion of this transaction on the Great British Tokenised Deposit platform is a landmark moment for UK financial services. For the first time, the UK’s leading banks have shown that tokenised deposits can move seamlessly between institutions on a common, interoperable infrastructure, bringing the benefits of programmable money to customers while preserving the safety, trust and regulatory protections of commercial bank money.

Source: UK Finance