UK Finance and 6 Major Banks Launch Tokenized Sterling Pilot Until 2026

UK Finance, the trade body representing more than 300 financial institutions in the UK, has unveiled a two-year pilot for tokenized sterling deposits (GBTD) in collaboration with six of the country’s largest banks: Barclays, HSBC, Lloyds Banking Group, NatWest, Nationwide, and Santander.

The initiative, announced Friday, seeks to explore how digital representations of pound sterling commercial bank money can improve payments, fraud prevention, and settlement efficiency. The pilot will run until mid-2026 and is positioned as a step toward modernizing the UK’s financial market infrastructure.

UK Banks Team With Quant Network on Tokenized Deposits Pilot to Power “Tomorrow’s Economy”

The technical backbone for the project will be provided by Quant Network, a UK-based firm specializing in blockchain interoperability. Notably, the initiative aims to move beyond faster payments into programmable money, which can transform how value is exchanged.

Quant founder and CEO Gilbert Verdian said the project is about “building the infrastructure powering tomorrow’s economy,” positioning the UK at the forefront of tokenized money innovation.

The Three Use Cases

• Online marketplace payments: Tokenized deposits will enable safer person-to-person transactions, cutting fraud risks and boosting trust between buyers and sellers.
• Remortgaging processes: By digitizing mortgage settlements, the pilot aims to increase transparency, accelerate timelines, and reduce conveyancing fraud.
• Wholesale bond settlement: Linking tokenized commercial bank money to tokenized assets could streamline digital bond settlement and broader asset exchange.

Quant previously delivered the first phase of the Regulated Liability Network (RLN), a 2024 initiative backed by UK Finance that tested shared-ledger infrastructure for payments and settlements.

The RLN experiment brought together major financial institutions, including Citi, Mastercard, Standard Chartered, Virgin Money, and Visa, alongside the six banks now participating in the GBTD trial.

UK Finance’s September 2024 report concluded that a blockchain-powered RLN could enable programmable payments, cut fraud, and reduce the cost of failed transactions in a system that processes $14.5 trillion annually in UK payments.

Jana Mackintosh, UK Finance’s managing director of payments, said collaboration between the private sector and regulators would be key: “The private sector wants to invest in the future of commercial bank money, and a partnership with regulators is the best way of successfully making this happen.”

UK Finance emphasized that the RLN and its GBTD pilot could provide a “common point of access” for new firms while maintaining the singleness of money, a priority outlined in the Bank of England’s recent discussion paper on payments innovation.

By 2026, the pilot will assess how tokenized deposits can enhance the integrity of commercial bank money while facilitating the wider adoption of wholesale CBDCs, tokenized assets, and interoperable payment solutions in the UK.

Tokenization Push Gains Momentum as UK Tests Digital Gilts and LSEG Launches Blockchain Fund Platform

The global race to tokenize real-world assets (RWAs) is accelerating, with traditional finance players stepping firmly into the space.

Research from Ernst & Young indicates that half of institutional investors are considering tokenized products, while Standard Chartered forecasts the market could reach $30.1 trillion by 2034. The sector has already grown 80% in two years, recently hitting a record $17.4 billion.

At the core of the movement is the promise of turning tangible and financial instruments, such as bonds, equities, or private funds, into blockchain-based tokens, enhancing market efficiency, liquidity, and accessibility.

“Real-world assets will have the biggest impact on traditional finance this year,” said Erin Chen, CEO of Injective Labs, noting that tokenization bridges Wall Street and DeFi.

The UK is positioning itself as a testbed. In March, the Treasury unveiled plans to pilot digital gilts, dubbed DIGIT, issued on distributed ledger technology (DLT).

Unlike traditional issuance, DIGIT would operate on a separate blockchain-based system, allowing short-dated bonds to settle more quickly, reduce costs, and broaden investor participation.

Building on the momentum, the London Stock Exchange Group (LSEG) launched its Digital Markets Infrastructure (DMI) platform for private funds this month. Built with Microsoft on Azure, the system supports tokenization, issuance, and post-trade settlement.

The first deployment saw MembersCap tokenize its MCM Fund 1, with regulated digital exchange Archax acting as nominee. The LSEG says the infrastructure will expand to other asset classes, unlocking access to traditionally illiquid private markets.

Despite the promise, challenges remain. Tokenized products remain a small slice of the global capital markets, and their adoption depends on clear regulation, robust technology, and investor readiness.

Yet with government pilots, exchange-led platforms, and institutional capital pouring in, tokenization is no longer a distant vision; it is rapidly becoming the next frontier for financial markets.

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