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UK Banks Make History With First Interbank Transactions Using Tokenized Deposits
Lloyds, NatWest, Barclays and HSBC completed interbank transactions using tokenized deposits.
The banks tested tokenized deposits through the Great British Tokenised Deposit project.
UK banks are exploring tokenized deposits for faster and programmable financial settlements.
UK Finance has announced the first interbank transactions using blockchain-based tokenized deposits. Britain’s biggest banks, including Lloyds, NatWest, Barclays and HSBC, completed real-world tests across mortgage and online payments.
The move could now open the door to faster bank payments, a new way to use digital money and tokenized bonds.
UK Banks Test Tokenized Deposits in Real Transactions
On Thursday, September 24, 2026, UK Finance announced that the blockchain-based transactions were completed under its Great British Tokenised Deposit (GBTD) project.
The trial showed that tokenised deposits from different banks can move across separate blockchain systems and settle payments automatically.
UK Finance said the GBTD project aims to bring these benefits while keeping the protections of normal bank deposits.
Mortgages and Online Payments Go On-Chain
Lloyds Banking Group, NatWest and Barclays completed two live mortgage remortgage transactions. The system held the money until the property transfer was confirmed on the blockchain.
Once the transfer was verified, the funds were automatically sent between the banks.
At the same time, HSBC led another test based on an online marketplace purchase. The system used programmable deposits to hold the buyer’s money in the account. The funds were then released to the seller after the system confirmed that the goods had been delivered.
To execute this transaction, the project uses technology from Quant Network.
Tokenised Deposits Challenge Stablecoins Dominance
The successful trial supports the Bank of England’s (BoE) push to keep digital money within regulated banks. Unlike private stablecoins such as USDT and USDC, tokenised deposits are normal bank deposits turned into digital tokens on a blockchain.
These deposits use the same bank money but add blockchain features. So, they can make payments faster and allow banks to set rules for when money is sent.
BoE Governor Andrew Bailey has also warned about risks linked to privately issued stablecoins.
Digital Bonds Could Be the Next Step
UK Finance said banks are already working on this phase, with plans to issue three tokenised digital bonds in early 2027.
The bonds are expected to use the same tokenised deposit system for trading, clearing and settlement. This would allow banks to test how blockchain can be used for bigger financial deals, not just bank payments.
Due to such development, Citi Institute predicts that tokenised financial assets could grow to $5.5 trillion to $8.2 trillion by 2030.
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