UK banks complete first interbank tokenized deposit transfers
Lloyds, NatWest, Barclays and HSBC completed the United Kingdom's first interbank transfers using tokenized deposits, including two live remortgage payments and a simulated online marketplace transaction. The pilot used sterling deposits recorded on a blockchain so funds are released automatically when agreed conditions, such as property transfer confirmation or delivery verification, are met. The Bank of England prefers tokenized deposits over stablecoins because they keep bank money inside the regulated system. Participating banks plan to create a company, write a rulebook and issue three digital bonds settled with tokenized deposits in early 2027, but wider customer access remains limited while the pilot continues.
Tokenized deposits can settle sterling instantly on a blockchain.
Context
Several UK banks ran pilot tests using tokenized deposits on a blockchain. The Bank of England has signalled support for tokenized deposits over stablecoins. Next steps are forming a company and issuing three digital bonds in early 2027 if…
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