British Banks Clear First Interbank Transactions Using Tokenised Deposits

Britain's biggest banks have successfully completed their first interbank transactions using tokenised deposits, marking an important milestone in efforts to put commercial bank money on blockchain rails. Lloyds Banking Group, NatWest, and Barclays carried out two remortgage transactions using tokenised sterling deposits under the Great British Tokenised Deposit (GBTD) initiative.

The GBTD project brings together seven major banks, including HSBC, Monzo, Nationwide, and Santander, to explore the use of tokenisation for deposits. The technology represents digital representations of money held in conventional commercial bank accounts, allowing deposits to operate on distributed-ledger infrastructure while retaining their legal and regulatory characteristics.

The latest tests demonstrated that tokenised deposits issued by different banks can move between institutions over shared, interoperable infrastructure. In the remortgage tests, funds were locked in a customer's account and automatically released when the transaction reached completion.