TL;DR
- Seven UK banks completed real pound sterling transactions on a shared blockchain infrastructure as part of the GBTD pilot.
- Two remortgages and a marketplace payment were settled using real customer deposits, although the trade goods were simulated.
- By 2027, three digital bonds are planned that will integrate tokenized deposits with regulated assets within the same environment.
The UK financial system is moving toward the tokenization of bank deposits. Seven banks —Barclays, HSBC UK, Lloyds Banking Group, Monzo, Nationwide, NatWest and Santander— are participating in the initiative Great British Tokenised Deposit (GBTD), a consortium that processed real transactions in pound sterling through a shared blockchain infrastructure developed by Quant.
The completed operations include two remortgages and a marketplace payment, although distinct subgroups of institutions executed each transaction independently.
Deposits That Never Stop Being Deposits
A tokenized deposit is a digital representation of the money a commercial bank owes a customer. Tokenization modifies the way that payment can be recorded and instructed, but does not convert the underlying fund into a freely circulating cryptocurrency.
Throughout all pilot operations, customer funds remained within the regulated system. This distinguishes it from a public stablecoin, whose backing and rights depend on the legal structure of the issuer. The model aims to grant programmable functions to conventional deposits without abandoning the regulatory protections associated with commercial money.
Banks Solve Two Distinct Payment Problems
In the case of the remortgages, three banks —Barclays, Lloyds and NatWest— reserved the required amount in the customer’s account and released it once the platform received confirmation that the closing condition had been met. This design would eliminate the need to transfer funds in advance to separate escrow accounts, and UK Finance noted that it can also allow customers to keep accruing interest up until the moment of settlement.Â
As for the marketplace, HSBC UK participated in a customer-to-customer payment where the buyer’s funds were held in reserve and released to the seller upon confirmation of the exchange condition, although no physical goods changed hands.
The GBTD platform was designed to connect institutions without replacing their internal banking systems with a single public blockchain. That interoperability between entities with their own accounts and systems is the project’s central achievement, beyond the mere representation of pounds as tokens.
By the first quarter of 2027, the participating banks plan to issue three digital bonds and create an operating company with a formal governance framework. The goal is to coordinate the cash and asset legs in a simultaneous settlement, so that neither party is left exposed during the process.
