Britain’s biggest lenders are launching a live pilot of tokenized sterling deposits, advancing plans to move customer money onto programmable rails after Bank of England Governor Andrew Bailey urged the industry to prioritize tokenization rather than issuing their own stablecoins.
Trade group UK Finance said Barclays, HSBC, Lloyds Banking Group, NatWest, Nationwide, and Santander will run real transactions through the pilot, which begins Friday and is slated to run until mid-2026.
UK Finance stated that the platform is designed for interoperability across new forms of digital money and payment systems. It will offer tokenization-as-a-service, allowing institutions without in-house capabilities to participate. A public webinar on Oct. 6 will provide further details as the pilot progresses.
The project will test three use cases: person-to-person payments on online marketplaces with enhanced fraud controls, remortgaging processes to speed up conveyancing and reduce fraud, and digital asset settlement to connect tokenized customer money to tokenized assets.
Building on earlier phases of the Regulated Liability Network (RLN), the move aims to keep commercial bank money within the regulated system while introducing programmability and faster settlement. Tech and advisory support comes from Quant, EY, and Linklaters.
Tokenized deposits are digital representations of commercial bank money. Unlike stablecoins, they sit squarely within existing bank regulation and deposit-protection regimes. The pilot lands alongside the UK’s broader rule-making. Previously, the Financial Conduct Authority stated that it expects to finalize stablecoin rules in 2026, while the Bank of England has indicated that banks can experiment with tokenized deposits within the current framework.
© 2025 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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