TLDR
- Lloyds, NatWest and Barclays completed two mortgage transactions using tokenized deposits, the first interbank transfers of their kind.
- Three banks including HSBC ran a person-to-person test that simulated an online marketplace purchase.
- The trials are part of the Great British Tokenised Deposit project run by industry body UK Finance.
- Tokenized deposits hold the same legal status as regular bank deposits, unlike privately issued stablecoins.
- Participating banks plan to issue three digital bonds in the first quarter of 2027 that settle with tokenized deposits.
Britain’s largest banks have completed what UK Finance describes as the world’s first transactions using tokenized deposits to move money between separate institutions.
🇬🇧NEWS: UK’s biggest banks have completed the world’s first interbank transactions using blockchain-based tokenized deposits.
Lloyds, NatWest and Barclays used tokenized deposits in two mortgage transactions, while HSBC and other banks tested a peer-to-peer payment. pic.twitter.com/p30uapcr51
— SolanaFloor (@SolanaFloor) September 24, 2026
Lloyds, NatWest and Barclays carried out two mortgage transactions using the technology, the banking industry association told Reuters. A separate group of three banks, including HSBC, ran a person-to-person payment test this week.
The work is part of the Great British Tokenised Deposit project, which UK Finance runs. Participating banks committed to the effort through a pilot launched last year.
What Tokenized Deposits Are
Tokenized deposits turn money held in a bank account into a digital token recorded on a blockchain. The token carries the same legal status as the deposit it represents.
That sets them apart from stablecoins, which are usually issued by private companies and pegged to the US dollar or another currency. Stablecoins move money out of the banking system, which has raised questions about the cost of credit and monetary sovereignty.
The Bank of England has said it would rather see banks experiment with tokenized deposits than with stablecoins.
Banks and other financial firms have spent more than a decade trying to bring blockchain into their own systems. They have created tokens standing in for deposits, stocks, bonds and currencies.
The problem was that each lender built its own blockchain platform. Those separate systems could not talk to each other, which blocked transfers between institutions. The new trials were designed to show that barrier can be cleared.
How The Tests Worked
In the simulated online purchase, programmable deposits set money aside in the buyer’s account. The funds were released to the seller only after the goods were recorded as received.
Jana Mackintosh, UK Finance’s managing director for Payments and Innovation, said the setup showed the technology could lower fraud risk. Money moved between accounts during the test, but no real goods changed hands.
The two remortgage transactions used a similar structure. Locked funds were released automatically once the property transaction completed.
UK Finance says tokenized deposits could cut transaction costs and speed up processing compared with existing payment systems. Banks have made similar claims about moving tokenized assets more broadly.
The project now plans to set up a company and write a rulebook and governing framework. That structure is meant to carry the work from pilot stage into full production.
Mackintosh said other countries have been asking about the project over the past year. She cited conversations with counterparts in Europe who wanted to understand how to catch up.
The United States has its own effort underway. The Clearing House, a banking association and payments company, announced an interbank tokenized deposit project in June.
The next step in Britain is the digital bond issuance. Banks involved in the project plan to issue three digital bonds in the first quarter of 2027 that can be traded and settled with tokenized deposits.
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