UK Banks Pioneer Tokenized Deposits for Interbank Transactions

Britain's largest banks have made history by completing the world's first interbank transactions using tokenized deposits. Lloyds Banking Group, NatWest, and Barclays successfully conducted two remortgage transactions using tokenized sterling deposits under the Great British Tokenised Deposit (GBTD) project.

The project, developed in collaboration with blockchain technology company Quant, enables banks to move bank money between institutions while allowing payments to be programmed around specific conditions. In the remortgage transactions, funds were automatically released once the property transaction was completed.

The GBTD project aims to address the interoperability problem faced by tokenized assets by creating shared infrastructure for tokenized commercial bank money. The initiative aligns with the Bank of England's preference for regulated bank-based forms of digital money.