U.K. Banks launch Live Pilot for tokenized Sterling Deposits
U.K. banks are now testing tokenized sterling deposits in a live pilot.This initiative aims to modernize the country’s financial infrastructure using distributed ledger technology.
UK Finance,alongside six major banks,has initiated this pilot. It will run untill mid-2026. The banks involved are barclays, HSBC, Lloyds Banking Group, NatWest, Nationwide, and Santander. The project will explore real-world applications like online payments, remortgaging, and digital asset settlements.
The pilot builds on the Regulated Liability Network (RLN). This multi-phase project tests how tokenization can be applied to regulated money. Previous RLN trials showed that commercial bank deposits could be converted into digital tokens without compromising trust and security.
The Bank of England supports this move. Governor Andrew Bailey encourages banks to focus on tokenized deposits over issuing stablecoins. This approach is seen as a more stable and regulated way to modernize money.
A key feature of the pilot is its interoperability. The platform will work wiht other digital money forms and payment systems. this includes tokenized deposits, potential central bank digital currencies, and projects like the digital gilt (DIGIT).
Tokenization-as-a-service is also included. This ensures that even institutions without the resources to develop their own systems can participate. This widens access and promotes an inclusive digital payments framework.
this pilot aims to enhance transaction speed and reduce fraud. It represents a important step toward a modernized financial system in the U.K.
