Major UK banks including Barclays, HSBC, Lloyds, Monzo, Nationwide, NatWest and Santander began piloting tokenized sterling deposits in 2025, testing whether ordinary bank money could be reco
Major UK banks including Barclays, HSBC, Lloyds, Monzo, Nationwide, NatWest and Santander began piloting tokenized sterling deposits in 2025, testing whether ordinary bank money could be recorded and moved on a blockchain while keeping the protections of a traditional bank deposit. The project aimed to make payments faster and programmable, while also exploring whether the technology could help reduce fraud.
That pilot has now moved into live transactions. Lloyds, NatWest and Barclays have completed two remortgage transactions using tokenized deposits, while a separate group of three banks including HSBC completed a customer-to-customer payment simulating an online marketplace purchase.
UK banks complete first interbank blockchain transactions using tokenised deposits
Lloyds, NatWest, and Barclays settled two remortgage transactions on blockchain using tokenised deposits—ordinary bank account balances recorded on distributed ledger rather than internal bank… pic.twitter.com/aZi0LDRbDk
— NewsTongue (@NewsTongueX) September 24, 2026
The transactions put the technology to work in real financial processes, testing whether tokenized deposits can speed up payments and automatically release funds when agreed conditions are met. Unlike cryptocurrencies, the money remains a pound-denominated bank deposit held by a regulated bank.
This kind of trial is part of a global race, and some countries are already past the pilot stage. In the US, JPMorgan’s tokenized deposit product has been running since 2019, and now processes between 2 and 5 billion dollars in transactions daily, with more than 1.5 trillion dollars moved cumulatively, and it recently expanded to instantly settle currency conversions between the dollar and euro.
Switzerland ran its own first binding cross bank payment using tokenized deposits last September, with three of its biggest financial institutions settling transactions directly with each other on a public blockchain. Singapore has gone further with three of its three largest banks completed the country’s first live interbank transactions using tokenized deposits through a shared global settlement network, following a similar cross border transaction the same banks had already completed with Citi.
In the Middle East, First Abu Dhabi Bank became the first bank in the region to hit the same milestone, completing live transactions at scale with Citi in September. SWIFT, the messaging network nearly every bank in the world relies on, launched its own blockchain ledger in July to support a tokenized deposit pilot involving 17 banks across six continents, and regulators from Singapore, Japan, Switzerland and the UK have separately agreed to coordinate their approach to these pilots so the rules don’t end up conflicting across borders.
The urgency behind all of this comes down to the fear of losing deposits to stablecoins. Standard Chartered estimated in January that stablecoins could pull 500 billion dollars out of banks in developed markets by 2028, with an even larger hit, close to a trillion dollars, expected in emerging markets.
One major US bank’s own CEO has floated a far bigger number still, suggesting as much as 6 trillion dollars, roughly 35% of all US bank deposits, could eventually move toward stablecoins. A survey of bank executives by IntraFi found that 63% expect their institutions to lose a meaningful share of deposits within two years if stablecoins are ever allowed to offer reward-style payouts similar to interest, something current law technically bans but that banks worry issuers will find ways around anyway.
A tokenized deposit is built to counter that threat, because unlike a stablecoin, the money never actually leaves the bank. It’s still a deposit, represented differently, which means the bank keeps the funding, keeps the customer relationship, and keeps earning from it the same way it always has, while still offering the instant, programmable features that made stablecoins attractive in the first place.
When Quant confirmed it had been selected to build the infrastructure for the project, its token jumped more than 5% that day, alongside a visible spike in large-wallet transactions.
UK banks have completed the first live customer transactions using tokenised sterling deposits, and they ran on the #GBTD platform built by Quant.
Delivered through the Great British Tokenised Deposit initiative, convened by @UKFtweets with @Barclays, @HSBC_UK, @LloydsBank,… pic.twitter.com/oJjQpU2cys
— Quant (@quantnetwork) September 24, 2026
The reaction gives investors another part of the tokenized-money market to watch. Cryptosensei called the completion of interbank transfers onchain by four major UK banks “a pretty big milestone for tokenized deposits.” Reinforce added an important distinction that tokenized deposits remain liabilities of individual banks, while the interbank system is mainly about giving those banks a shared way to settle transactions.
For investors, that distinction matters because the companies building the infrastructure could benefit even if the banks themselves remain in control of the deposits. Bitmonk summed up the trend by saying banking infrastructure is “clearly moving toward tokenized settlement.” If more banks and governments adopt these systems, infrastructure providers selected for large projects could see similar market attention to Quant. At the same time, stablecoin issuers face a different question: whether banks developing regulated tokenized-deposit systems will reduce the market they expected stablecoins to capture.
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