Banks in the seven-member Great British Tokenised Deposit (GBTD) initiative completed live customer transactions using tokenised sterling deposits on a shared platform, UK Finance said. The first set of live transactions included two remortgage completions and one consumer marketplace purchase. The initiative involves Barclays, HSBC UK, Lloyds Banking Group, Monzo, Nationwide, NatWest and Santander.
Tokenised deposits are digital representations of conventional commercial-bank money. They retain the protections of ordinary deposits while allowing payments to execute when programmed conditions are met. UK Finance convened the Great British Tokenised Deposit initiative, with Quant developing the platform, EY managing the project and Linklaters providing legal advice and rulebooks.
LIVE PILOTS TEST CONDITIONAL RELEASE
In the two remortgage completions, deposit funds were locked and released automatically when completion conditions were satisfied. UK Finance said this reduced manual checks and settlement delays, adding that the technology can also ensure customers continue to earn interest on funds held in their accounts until completion. The pilots also explored a digital connection with HM Land Registry for future transactions.
The marketplace pilot involved a consumer buying an item from a private seller. Money remained locked in the buyer’s account until the goods were successfully exchanged, which UK Finance said helps reduce transaction risk. UK Finance did not identify which participating bank handled each transaction.
DIGITAL-ASSET SETTLEMENT COMES NEXT
The shared infrastructure allowed regulated bank money to move in tokenised form across a multi-bank network. EY, which managed the project, said the pilots had laid the foundations for an operational GBTD service.
Further pilots are expected over the next few months, linking tokenised customer money with digital assets for settlement. Participating banks are due to issue digital debt instruments that can be traded and settled, with coupons paid in tokenised deposits. UK Finance said this would unlock the benefits of delivery-versus-payment-versus-reserves (DvPvR) settlement.