UK Finance launches pilot for tokenised sterling deposits

• UK Finance launches GBTD pilot with six banks to test tokenised sterling deposits until 2026.
• Quant Network to power digital pound pilot, exploring payments, remortgaging and bond settlement.
• FCA readies crypto rules by 2026 as UK tests tokenised deposits for safer, efficient transactions.

UK Finance has launched a pilot programme for tokenised sterling deposits (GBTD), marking a step towards digital innovation in traditional banking.

The initiative, announced on Friday, is being developed with six major banks—Barclays, HSBC, Lloyds Banking Group, NatWest, Nationwide and Santander—and will run until mid-2026.

The pilot will test how tokenised deposits can modernise payments, reduce fraud, and improve settlement processes, while also aligning with the country’s wider push to regulate crypto-assets by 2026.

Six banks test digital pound deposits

The GBTD pilot is designed to create a digital representation of commercial bank money in pound sterling.

By joining forces with the six banks, UK Finance aims to measure how tokenised deposits can enhance efficiency for customers, businesses and the wider UK economy.

The initiative is expected to support safer transactions, streamline settlement systems, and give consumers greater control over payments.

Quant Network, a UK-based blockchain interoperability company, will provide the underlying infrastructure for the project.

The firm previously supported the Regulated Liability Network (RLN), a shared ledger-based financial market framework tested in 2024 with the same banks and additional institutions such as Citi, Mastercard, Standard Chartered, Virgin Money and Visa.

Quant Network to build infrastructure

Quant’s involvement will enable the GBTD pilot to test use cases across three areas—online marketplace payments, remortgaging processes and wholesale bond settlement.

The company said the project goes beyond payments, introducing programmable money that can alter how value is managed.

The technology aims to offer efficiency gains and new settlement models that could support both retail and wholesale financial activity.

The project builds directly on RLN’s earlier success, which created a regulated environment for testing distributed ledger technology in traditional banking.

By applying the lessons from that initiative, the GBTD pilot is expected to generate more practical outcomes that could be adopted at scale in the coming years.

Pilot linked with upcoming regulations

The launch comes as the Financial Conduct Authority (FCA) finalises a regulatory regime for crypto-assets, with implementation targeted for 2026.

In April 2025, the Treasury published a policy note clarifying how qualifying stablecoins and tokenised deposits will differ from electronic money.

The FCA has accelerated crypto approvals after criticism, preparing the ground for a more structured framework.

Meanwhile, the European Union has already brought its Markets in Crypto-Assets (MiCA) regulation into effect, covering many aspects of tokenisation.

However, tokenised deposits remain outside MiCA’s remit because they continue to fall under traditional deposit and banking rules.

This regulatory distinction highlights the UK’s efforts to create a clear path for tokenised commercial bank money as part of its broader financial innovation strategy.

What the project aims to achieve

The pilot is expected to run for at least 18 months, with results shaping future policy decisions.

By testing tokenised deposits in real-world scenarios, UK Finance and its partners want to understand how they can fit within regulated banking systems.

The project is positioned as an experiment in bringing distributed ledger technology into mainstream financial services without displacing existing banking structures.

The post UK Finance launches pilot for tokenised sterling deposits appeared first on CoinJournal.