UK Finance pilots tokenized sterling deposits with six major banks

Timothy Wuich
3 Min Read

UK Finance Launches Pilot for Tokenized Sterling Deposits

UK Finance, a trade association that represents over 300 financial services firms in the United Kingdom, has kicked off a pilot project for tokenized sterling deposits (GBTD).

On Friday, the trade group announced that this pilot phase for the tokenized deposits initiative aims to provide a digital representation of traditional British pound commercial bank money. This project is being launched in partnership with six leading banks in the UK: Barclays, HSBC, Lloyds Banking Group, NatWest, Nationwide, and Santander.

UK Finance plans to continue the pilot until mid-2026, focusing on exploring benefits for customers, businesses, and the UK economy. The project aims for improved control over payments, prevention of fraud, and more efficient settlement processes.

Collaboration and Infrastructure

The infrastructure for UK Finance’s GBTD initiative will be supplied by Quant Network, a UK-based platform that specializes in blockchain interoperability.

Quant’s role builds on its successful completion of the first phase of the Regulated Liability Network (RLN), a UK-led effort for financial market infrastructure based on shared ledger technology, which was launched by UK Finance in 2024.

The RLN initiative involved all six banks engaged in the GBTD project, along with other significant financial institutions such as Citi, Mastercard, Standard Chartered, Virgin Money, and Visa.

The GBTD project will focus on three main use cases: online marketplace payments, remortgaging processes, and wholesale bond settlement.

As Quant’s founder and CEO, Gilbert Verdian, stated, the project aims to extend beyond mere payment improvements, initiating new forms of programmable money that will “fundamentally transform how value is moved and managed.”

Verdian expressed, “Our involvement underscores Quant’s leadership in digital finance, as we collaborate with the UK’s leading institutions to establish the infrastructure that will drive the economy of the future.”

The launch of UK Finance’s tokenized deposits pilot coincides with the Financial Conduct Authority (FCA) finalizing its cryptocurrency regulatory framework, with the full regime anticipated to take effect in 2026.

In April 2025, the UK Treasury released a policy note on the “Future financial services regulatory regime for crypto assets,” emphasizing a clear distinction between qualifying stablecoin, tokenized deposits, and electronic money.

According to a Financial Times report published on Sunday, the FCA has been accelerating crypto approvals in response to recent criticism, as the UK moves closer to implementing a comprehensive regulatory framework next year.

Meanwhile, the European Union is steadily progressing with the application of the Markets in Crypto-Assets (MiCA) regulation, which came fully into effect in late 2024. While MiCA generally oversees tokenization across various crypto assets, tokenized deposits remain outside its regulatory scope, continuing to be governed by traditional banking and deposit frameworks.

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