UK’s Biggest Banks Complete First Live Customer Transactions Using Tokenized Deposits

Seven lenders, real money: Last week, UK banks completed their first live customer transactions using tokenized deposits under the Great British Tokenised Deposit (GBTD) initiative. Its seven participating banks, including Barclays, HSBC UK, Lloyds and NatWest, ran two remortgages and one peer-to-peer consumer payment. The initiative is coordinated by UK Finance, the UK’s banking and finance trade body.

• Why it matters: Tokenized deposits are moving from design into live testing across Europe. Germany’s CBMT is testing corporate payments and treasury workflows, UBS, PostFinance and Sygnum have tested deposit tokens between Swiss banks, and five Spanish banks completed a joint proof of concept in July. The experiments differ, but they increasingly test the same question: which payment workflows gain enough from programmability to justify putting bank deposits onto a new rail?

A shared platform: Only some of the seven banks, among them HSBC and Lloyds, issue tokenized deposits of their own. Technology provider Quant built the common GBTD platform, allowing banks at different stages of development to test cross-bank transactions through the same orchestration layer.

• “For the purposes of the pilot, it wasn’t necessary for every participating bank to already have its own tokenized-deposit solution in production. We could leverage GBTD’s infrastructure to test the concept and focus on whether we could move value between parties across the network,” Ryan Hayward, Head of Digital Assets and Strategic Investments at Barclays, told Blockstories.

How it works: To move that value, all three transactions used conditional payments: the funds stayed locked in the customer’s account until an agreed event released them. The banks started with remortgages, where the new loan usually passes through a solicitor before paying off the old mortgage.

• “Instead of wiring funds into a solicitor’s account and waiting for them to be sent on, the funds can remain locked at the first bank until the solicitor authorises the transfer. You effectively remove that intermediate funding and waiting step,” Hayward said.

Safer marketplace payments: The third transaction applied the same lock to a peer-to-peer purchase of the kind consumers make on online marketplaces, where buyer and seller usually don’t know each other. The buyer’s money stayed locked until the item changed hands, so the seller knew the funds were there and the buyer paid only once the exchange took place. That targets purchase scams, the UK’s most common form of authorised push payment (APP) fraud, which caused losses of £118.1 million in 2025.

Settlement stayed conventional: The payment flow changed for the customer, but interbank settlement stayed on existing rails. In the remortgages, the transfer between the two banks still went through CHAPS, the Bank of England’s traditional high-value payment system.

• Not unique to GBTD: CBMT follows a similar hybrid model. Client payments move instantly on the shared ledger, while the banks carry exposures to each other until they settle in central bank money outside it.

Bonds next: GBTD’s next pilots will test how tokenized deposits can work alongside central bank money in capital markets. In the first quarter of 2027, the banks plan to issue three digital bonds and use tokenized deposits for the purchase and coupon payments. The interbank cash leg would then be synchronised with settlement in central bank money.

From transaction to product: The seven banks have not yet set a date for a commercial service, and UK Finance has warned that without a commercial model “there will be no innovation and no growth.” Hayward highlights one key condition:

• “The next question is which use cases institutions actually want to take to market. GBTD can provide the rail, but commercialisation will depend on building the network and proving that there are use cases worth scaling.”