British banks make first interbank transactions using tokenised deposits

International Finance Business Desk — Mon, 28 Sep 2026 01:00:57 +0000

Britain’s biggest banks have completed the first interbank transactions using tokenised deposits, which is an important milestone in efforts to put commercial bank money on blockchain rails without moving it outside the regulated banking system.

Lloyds Banking Group, NatWest and Barclays carried out two remortgage transactions using tokenised sterling deposits, while a separate group of three banks including HSBC tested a person-to-person payment modelled on an online marketplace purchase, UK Finance said.

The transactions were conducted under the Great British Tokenised Deposit (GBTD) initiative, which brings together Barclays, HSBC UK, Lloyds Banking Group, Monzo, Nationwide, NatWest and Santander.

Tokenised deposits are digital representations of money held in conventional commercial bank accounts. Rather than changing what the money is, tokenisation changes how it is recorded and transferred, allowing deposits to operate on distributed-ledger infrastructure while retaining the legal and regulatory characteristics of bank money.

The latest tests address a major obstacle that has limited banks’ use of blockchain.

Financial institutions have spent years developing their own tokenisation systems for deposits and other assets, but proprietary networks could not easily communicate with each other.

The GBTD trials demonstrated that tokenised deposits issued by different banks can move between institutions over shared, interoperable infrastructure.

In the remortgage tests, funds were locked in a customer’s account and automatically released when the transaction reached completion. UK Finance Ministry said the process could reduce manual checks and settlement delays while allowing customers to continue earning interest on funds until completion.

The project also examined how future connections with HM Land Registry could further automate the process.

The marketplace transaction demonstrated another feature of tokenised deposits: programmability. Money could be reserved in a buyer’s account and released to the seller only when the conditions of the transaction were met.

Although the pilot did not involve an actual physical exchange of goods, it showed how payment could be linked to delivery, potentially reducing transaction risk and fraud.

The distinction between tokenised deposits and stablecoins is central to the UK’s approach to digital money. Tokenised deposits remain liabilities of regulated commercial banks and retain the protections associated with ordinary deposits.

Stablecoins, by contrast, are privately issued digital tokens, generally designed to maintain a fixed value against a currency or other asset.

The Bank of England has indicated that it wants commercial banks to explore tokenised deposits as digital payments develop, rather than allowing privately issued stablecoins to displace bank deposits on a large scale.

The issue has wider implications because a shift from bank deposits into privately issued digital money could affect bank funding, credit creation and the monetary system.

For banks, the attraction of tokenisation extends beyond faster payments. Programmable money could enable automatic fund transfers upon meeting specified conditions, while tokenised assets could facilitate more efficient trading and settlements.

That could reduce reconciliation, operational and settlement costs and create new forms of delivery-versus-payment transactions across retail and wholesale markets.

The UK banking industry is now preparing to move the project beyond the pilot stage. UK Finance said participants intend to establish a company and develop a rulebook and governance framework for the infrastructure.

ALSO READ | Goldman Sachs, BofA-led consortium plans 2027 stablecoin launch

The banks also plan to issue three digital bonds in the first quarter of 2027 that can be traded and settled using tokenised deposits.

The initiative is part of a wider international push to bring traditional financial assets and money onto distributed ledgers.

In August, HSBC and Standard Chartered completed a live cross-border tokenised-deposit transaction using Swift’s blockchain-based ledger, demonstrating that interoperability is also becoming a focus beyond domestic payments.

The UK’s project is notable because it seeks to preserve commercial bank money while adding functions associated with blockchain, including programmability, conditional settlement and potentially round-the-clock processing.

UK Finance has previously estimated that tokenised deposits could generate more than 3 billion pounds in total economic benefits, based on an analysis with EY covering more than 40 potential business benefits.

The next phase will test whether the technology can work reliably at greater scale and across more complex financial transactions.

The UK Finance further anticipates that upcoming pilots will include digital-asset settlement, which involves connecting tokenised customer money with digital assets for delivery versus payment transactions.

For Britain’s banks, the immediate challenge is therefore no longer simply proving that a deposit can be represented digitally.

Building common infrastructure, rules, and governance allows competing banks to use tokenised money together.

If those arrangements can be scaled, tokenised deposits could become another layer of the UK payments system, combining the established framework of commercial bank money with the programmable features of blockchain technology.

The post British banks make first interbank transactions using tokenised deposits appeared first on International Finance.

Open banking set to revolutionise the way consumers handle money, finds Network Research

International Finance Desk — Wed, 27 Jun 2018 07:50:21 +0000

Since May 2018, the study has tracked a nationally representative sample of 500 UK consumers monthly to monitor levels of awareness toward Open banking and reveal actual and potential usage. The study found:

58% of consumers would consider themselves fairly likely to try new financial services to improve their finances. 34% said they’d be willing to try a service that reduces their work in comparing different financial products and services and recommends providers to save money and meet and exceed financial goals
Just over a third of UK consumers are aware of Open banking. Younger consumers aged 18-34 are significantly more likely to be aware than those who are aged 55+
Almost half of 18-34 year olds indicate their likelihood to try Open banking services in the near future. This response is a lot milder from 35-44 year olds and those aged 55+
The research shows varying degrees of consumer interest in different types of Open banking apps from ones that simply allow aggregation of accounts through to services that would actively recommend financial products or move money between different accounts to ensure a better financial return
Banks/financial companies are seen to be trusted more than technology companies or fintech businesses to provide Open banking applications
As Open banking is fairly new, it is no surprise that only around 1 in 50 have started using third party applications. The majority (over 4 in 5) found the sign-up process easy and all users say they find the Open banking services they have signed up to be ‘valuable’ (albeit to varying degrees)
Security of money (likely fraud through 3rd party data sharing) and general concern about safety of personal data & associated risks are seen as key barriers amongst those who are cold to Open banking
Although almost three-quarters of consumers currently use a tablet, PC or laptop for the day to day management of their bank accounts, only just over a quarter said they access accounts using an online app on a smartphone or tablet

Emerging fintech companies should look into speeding up this process by proving their reliability to consumers. They should work to reduce risk of fraud and secure personal data which will ultimately lead to gaining consumers’ trust.

More about Open banking & Network Research

The nine largest UK retail banks and building societies—Barclays plc, Lloyds Banking Group plc, Santander, Danske, HSBC, RBS, BoI, Nationwide and AIBG—have a legal requirement to allow certain information to be shared securely online with other regulated companies through Open banking, providing customer permission is given.

Open banking is set to fundamentally change the way consumers interact and control their finances. Network Research’s new product, Open, will look to support the financial and retail banker sectors through this change by allowing them to track perceptions and attitudes to Open banking with data provided through engaging visual charts or downloaded raw data. A total of five major financial services brands (including three of the big banks named above) have agreed to participate in this researchproject until April next year.

Richard Gaze, client director at Network Research said of the new offering, “Open banking is the latest innovation that is changing the landscape of the financial sector. Open will allow traditional retail banks, savings and investment providers and fintechs to understand the changing attitudes of consumers alongside this revolutionary trend and allow them to react quickly to public perception. The data is combined with consultancy from our own financial experts to ensure that clients won’t miss a thing.”

The post Open banking set to revolutionise the way consumers handle money, finds Network Research appeared first on International Finance.

Nationwide Archives - International Finance

British banks make first interbank transactions using tokenised deposits

Open banking set to revolutionise the way consumers handle money, finds Network Research