UK Finance has launched a collaborative industry pilot project to deliver the first UK live transactions of tokenised sterling deposits (GBTD).
The tokenised deposits are a digital representation of traditional sterling commercial bank money which retain the trust and regulatory protections of conventional deposits, with benefits such as enhanced speed and fraud protection. The project forms a vital part of the UK’s efforts to deliver next-generation money and payments via GBTD, UK Finance said, and will apply new digital technologies to the form of money most widely used by consumers and businesses today.
‘It will also enable UK commercial bank money to support government ambitions for growth and innovation, like the current plans for a digital gilt (DIGIT) and the National Payments Vision (NPV)’, the company added.
The platform will be fully interoperable between new forms of digital money, payment systems and institutions. It also offers tokenisation-as-a-service, ensuring that organisations without their own tokenised deposit capabilities can participate. Participating firms currently include Barclays, HSBC, Lloyds Banking Group, NatWest, Nationwide, and Santander, with support from Quant, EY and Linklaters.
‘In the near future, the UK will likely witness the development and adoption of multiple forms of digital money and payments. Ryan Hayward, head of digital assets at Barclays, commented.
“We believe commercial banks will have a role to play across all of these forms. The upgrading of bank deposits to a digital form will help to ensure that commercial bank money remains central to the economy and customers continue to benefit from the protections and trust that go alongside that form of money.”
Richard Hay, global co-head of fintech at Linklaters, said the pilot is a significant step forward in the evolution of digital money in the UK. He added:
“By enabling live transactions with tokenised sterling deposits, the industry is harnessing technology to enhance trust, security and efficiency across critical payment and settlement workflows. We are proud to support UK Finance as they bring together the industry to deliver innovation with strong regulatory underpinnings. The collaboration reflects not only the strength of the UK’s financial sector but also its determination to lead in setting standards for safe, practical adoption of tokenisation and digital payments.”
The pilot will build on the successes of the UK Regulated Liability Network (RLN) project’s earlier phases, positioning the UK as a leader in payments innovation, delivering tokenised deposits and programmable payments against three use cases:
- Person-to-person payments via online marketplaces: reducing fraud and enhancing buyer and seller confidence.
- Remortgaging processes: improving transparency, speeding up transactions, and mitigating conveyancing fraud.
- Digital asset settlement: connecting tokenised customer money to digital assets for seamless exchange.
Jana Mackintosh is managing director of UK Finance. She commented:
“This project is a powerful example of industry collaboration to deliver next generation payments for the benefit of customers and businesses – and an opportunity for the UK to lead globally in setting standards for tokenised money. Andrew Bailey, Governor of the Bank of England, recently called for innovation in how digital technology is applied to the money we use today. That’s exactly what tokenised deposits represent: a secure, regulated evolution of the payments landscape.”
The pilot will run until mid-2026 and aims to demonstrate tangible benefits to customers, businesses and the wider UK economy, which include giving users greater control over their payments, stronger fraud prevention, and more efficient settlement processes.
UK Finance will host engagements and events throughout the pilot to provide all stakeholders with updates on the work and next steps and encourages stakeholders to express interest in the project.
2 responses
Will these tokens come with automatic confirmation that the money represented is “clean”?
Or will we now have to check the background of a digital token?
This pilot marks a major milestone in the UK’s journey toward next-generation payments. Tokenised sterling deposits strike a strong balance by combining the trust and protections of commercial bank money with the efficiency of digital technology. The use cases—fraud reduction in marketplaces, faster remortgaging, and digital asset settlement—show real-world benefits. It’s encouraging to see such collaboration across banks and partners, positioning the UK as a leader in safe, regulated digital payments innovation.