UK Banks Complete First Live Tokenized Sterling Deposit Payments

• Major UK banks have completed the first live customer transactions using tokenized sterling deposits on shared infrastructure.
• Participants include Barclays, HSBC UK, Lloyds Banking Group, Monzo, Nationwide, NatWest and Santander.
• The project is using real commercial-bank money and is testing payments including person-to-person transfers and remortgage transactions.

**ID:** B25-09

**Site:** Bitcoinist

**Status:** READY

**Author:** Bitcoinist Editorial Team

**Focus Keyword:** Tokenization

**Image Keyword:** Sterling

**Category:** Technology

**Tags:** UK Finance, Tokenized Deposits, Sterling, Banks, Payments

**Primary Source:** https://www.ukfinance.org.uk/news-and-insight/press-release

The Money Is Still A Bank Deposit

That distinction is central to the project.

A tokenized deposit is not a privately issued stablecoin and it is not a digital pound issued by the Bank of England.

It is a digital representation of money already held as a commercial-bank deposit.

The aim is to retain the legal and regulatory protections attached to ordinary bank money while adding blockchain-style programmability and faster settlement.

Banks participating in the project include Barclays, HSBC UK, Lloyds Banking Group, Monzo, Nationwide, NatWest and Santander.

Quant built the platform, while EY is providing project management and Linklaters developed legal advice and the rulebooks.

The Pilot Is Testing Real Consumer And Financial Use Cases

The project includes person-to-person transfers and remortgage transactions.

UK Finance says digital-asset settlement will also be tested over the coming months.

That makes the experiment broader than sending a token from one test wallet to another.

The industry is trying to show that tokenized bank money can work across institutions and support transactions customers already understand.

Interoperability is the harder part.

Individual banks can build tokenized deposit systems relatively easily.

The real value emerges when a deposit issued by one institution can move across common infrastructure without breaking the protections or controls associated with the banking system.

The project is therefore a useful counterpoint to stablecoins.

Stablecoin companies are increasingly trying to make blockchain dollars look more like regulated bank money.

Banks are moving in the opposite direction, trying to make regulated deposits gain the programmability of blockchain assets.

The two models may eventually meet somewhere in the middle.

For now, the UK pilot shows tokenized deposits moving beyond demonstrations.

Actual customers have now used them to complete live sterling transactions.

*This article was written by the News Desk and edited by [Samuel Rae](https://bitcoinist.com/author/samuelrae/).*