Seven of the United Kingdom’s biggest banks have successfully executed live customer payments using tokenised British pound deposits on a common distributed ledger network. The trial, conducted on a platform created by Quant, included a remortgage payment and a consumer purchase, marking the first instance of regulated bank money being transferred in tokenised form between institutions.
Trial overview
The pilot demonstrated that digitised cash, still recorded as a liability of the issuing bank, can be moved across a shared system for everyday transactions. Participants processed a mortgage-related payment and a retail purchase, testing the feasibility of tokenised deposits for both large-scale and routine payments. By retaining the same legal protections as traditional deposits, the tokenised form aims to combine the speed of digital settlement with established regulatory safeguards.
Participants and technology
The initiative brought together Barclays, HSBC, Lloyds Banking Group, Monzo, Nationwide, NatWest and Santander. Quant supplied the underlying distributed ledger technology, enabling each bank to issue and receive tokenised versions of its own pound deposits while keeping the underlying liability on its balance sheet. Unlike public stablecoins, these tokens are not independent assets; they merely represent existing bank balances in a digital record.
Regulatory context
The Bank of England and the Financial Conduct Authority are actively preparing the UK financial infrastructure for broader tokenisation and extended settlement windows. Both regulators have expressed interest in supporting tokenised markets and are evaluating the role of stablecoins for institutional settlement. The current trial aligns with those policy directions, providing practical evidence that regulated cash can be digitised without sacrificing depositor protection.
Next steps
Having proved the concept for simple payments, the consortium plans to extend the platform to settle digital assets using tokenised cash. That phase would test whether tokenised deposits can act as a bridge between traditional finance and emerging crypto-based markets, potentially streamlining settlement of tokenised securities or other blockchain-native instruments.
Why it matters
The successful execution of tokenised pound transactions illustrates a realistic pathway for mainstream banks to adopt distributed ledger technology without abandoning existing deposit guarantees. If subsequent trials confirm that tokenised cash can settle digital assets efficiently, the UK could set a precedent for integrating regulated fiat money into the broader crypto ecosystem, influencing both domestic policy and international approaches to digital finance.
