UK Banks Complete First Interbank Transactions with Tokenised Deposits

UK banks have completed the first interbank transactions using tokenised deposits, marking a significant step towards the adoption of blockchain-based commercial bank money. The Great British Tokenised Deposit (GBTD) project, led by UK Finance, has successfully tested the transfer of tokenised sterling deposits between separate banks. This pilot phase saw Lloyds, NatWest, and Barclays complete two mortgage-related transactions using tokenised deposits, while another group of three banks, including HSBC, carried out a simulated person-to-person payment linked to an online marketplace.

The transactions demonstrated how programmable bank deposits can link payments to specific conditions. In the remortgaging process, funds were locked and automatically released once the property transaction was completed. This approach could help reduce fraud and make parts of the remortgaging process more efficient. The project has now moved beyond its pilot phase, with plans to establish a dedicated company and develop a rulebook and governance framework to support wider production use.

Participating banks also plan to issue three digital bonds in the first quarter of 2027 that can be traded and settled using tokenised deposits. The development comes as the UK expands its broader digital-finance infrastructure, with HM Treasury supporting work involving stablecoins, tokenised deposits, and digital settlement.