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UK Finance Launches Pilot for Tokenized Sterling Deposits with Six Major Banks

UK Finance Launches Pilot for Tokenized Sterling Deposits with Six Major Banks

UK Finance, the leading trade association for the UK’s financial services sector, has launched a pilot program for tokenized sterling deposits, in collaboration with six of the country’s largest banks: Barclays, HSBC, Lloyds Banking Group, NatWest, Nationwide, and Santander.

The initiative, announced on Friday, will test a digital version of traditional commercial bank money—referred to as GBP tokenized deposits (GBTD)—through mid-2026. The goal is to explore how tokenized money can improve payments, reduce fraud, and make financial settlements more efficient.

Building the Foundation for Digital Money

The technical infrastructure for the pilot is being provided by Quant Network, a UK-based firm specializing in blockchain interoperability. Quant previously supported the first phase of the Regulated Liability Network (RLN)—a shared-ledger initiative launched in 2024 that included participation from all six pilot banks, as well as other financial giants like Citi, Mastercard, Standard Chartered, Virgin Money, and Visa.

According to Quant CEO Gilbert Verdian, the project represents more than just a payments upgrade:

“This is about enabling programmable money that will fundamentally transform how value is moved and managed.”

Focused Use Cases

The pilot will initially test three main applications:

  • Payments in online marketplaces

  • The remortgaging process

  • Settlement of wholesale bonds

These use cases aim to demonstrate how digital forms of money could streamline operations for both consumers and institutions.

Regulatory Context

The launch comes as the UK Financial Conduct Authority (FCA) finalizes its broader crypto regulatory framework, expected to take effect in 2026. In April 2025, the UK Treasury published guidance distinguishing between tokenized deposits, stablecoins, and electronic money, marking a key step in the country’s approach to digital finance.

While the EU’s Markets in Crypto-Assets (MiCA) regulation—fully in force since late 2024—covers a broad range of crypto assets, tokenized bank deposits remain regulated under traditional banking laws and fall outside MiCA’s scope.

A Step Toward the Future of Finance

By testing tokenized deposits under real-world conditions with major banks, UK Finance is positioning the UK as a leader in digital money innovation. If successful, the project could pave the way for more efficient and secure financial infrastructure—bridging traditional banking with emerging blockchain technologies.

Featured image from: cointelegraph.com