UK Sets Sights on Global Payments Leadership Through Regulated Tokenized Sterling Trial
- UK Finance launches GBTD pilot with six UK banks to test tokenized deposits using blockchain. - Project aims to improve payment efficiency, fraud prevention, and digital asset settlement via three use cases. - Quant provides infrastructure for interoperability with existing systems, aligning with BoE's regulated innovation approach. - Initiative positions UK as payments leader, addressing crypto adoption gaps while maintaining banking safeguards.
UK Finance, representing the financial services sector, has initiated a pilot program to
Tokenized deposits are digital equivalents of fiat currency deposits created using blockchain, allowing for programmable transactions while maintaining the regulatory protections of traditional banking UK banks press on with tokenised deposits after BoE stablecoin warning [ 1 ]. The pilot will explore three scenarios: peer-to-peer payments on online platforms, remortgaging workflows, and settling digital assets. These use cases are designed to boost transparency, minimize fraud, and make transactions more efficient, especially in property transfers and international settlements UK banks launch industry pilot for tokenised sterling deposits [ 2 ]. The initiative also introduces a "tokenisation-as-a-service" model, enabling non-bank entities to participate in the platform UK banks press on with tokenised deposits after BoE stablecoin warning [ 1 ].
Quant, a provider of blockchain infrastructure, has been chosen to supply the core technology for the GBTD initiative US and UK crypto coordination could 'kick-start' British sector [ 4 ]. The system will support interoperability between tokenized deposits, current payment rails (including Faster Payments and RTGS), and blockchain environments. This setup is intended to align with the UK’s National Payments Vision and back government projects such as the digital gilt (DIGIT) scheme UK banks launch industry pilot for tokenised sterling deposits [ 2 ]. EY and Linklaters are also part of the collaboration, offering technical and legal support US and UK crypto coordination could 'kick-start' British sector [ 4 ].
This effort is consistent with the Bank of England’s (BoE) prudent stance on stablecoins. Governor Andrew Bailey has warned that stablecoins could undermine the banking sector by drawing funds away from regulated banks UK banks press on with tokenised deposits after BoE stablecoin warning [ 1 ]. Instead, the BoE advocates for innovation in tokenization, which keeps transactions within the banking system while utilizing digital technology. Jana Mackintosh, managing director at UK Finance, stated that tokenized deposits offer a "safe, regulated progression for the payments sector," echoing the BoE’s push for technological progress in currency UK banks press on with tokenised deposits after BoE stablecoin warning [ 1 ].
Industry executives have underscored the project’s significance. Ryan Hayward, head of digital assets at Barclays, remarked that tokenizing deposits ensures commercial bank money remains integral to the economy UK banks launch industry pilot for tokenised sterling deposits [ 2 ]. John O’Neil from HSBC called the project a "milestone in the UK’s financial transformation," while Paul Horlock of Santander highlighted the potential for "intelligent money" to boost consumer trust and adaptability UK banks launch industry pilot for tokenised sterling deposits [ 2 ]. The pilot also addresses the UK’s slower pace in crypto adoption compared to the US, with some analysts believing it could "jumpstart" the British digital asset industry.
By the middle of 2026, the pilot intends to showcase real-world improvements such as quicker payments, enhanced fraud protection, and increased user autonomy over transactions. If proven effective, the project could help shape global practices for tokenized money and serve as a model for merging digital finance with established banking. The UK’s partnership with
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