UK Finance, a leading industry organization that represents the banking and financial industry in the UK, has launched a collaborative project to deliver the first live transactions of tokenized sterling deposits in the country.
The tokenized deposits are a digital representation of traditional Sterling Commercial Bank money, which retains “trust and regulatory protection of conventional deposits, while offering benefits such as improved speed and fraud,” said the trading group, in September 26 press release.
According to Britain’s Finance, the system will build on Regulated Liability Network (RLN)Which was announced In April 2024 as a platform designed to promote innovation in financial transactions. The first phase of RLN involved the creation of a common “Innovation” platform over several forms of money, including existing commercial bank deposits and a shared book for tokenized commercial bank deposits.
The tokenized sterling deposit pilot will run until mid -2026 and aims to show concrete benefits for customers, companies and the broader UK economy, including giving users greater control over their payments, stronger prevention of fraud and more efficient decommissioning processes.
The platform will be completely interoperate between new forms of digital money, payment systems and institutions, says UK Finance. It also offers “tokenization-AS-A-service”, which allows organizations without their own tokenized deposit features to participate.
“This project is a powerful example of industry collaboration to deliver the next generation payments in favor of customers and companies – and an opportunity for the UK to lead globally when it comes to setting standards for tokenized money,” said Jana Mackintosh, CEO of UK Finance. “Andrew Bailey, governor of the Bank of England, recently demanded innovation in how digital technology is applied to the money we use today. This is exactly what tokenized deposits represent: a safe, regulated development of the payment landscape.”
The pilot will deliver tokenized deposits and Programmable payments For three specific use cases: the first is person-to-person payments through online marketplaces, as Britain’s finance would reduce fraud and improve the buyer and the seller’s confidence; Second, remortgaging processes, in order to improve openness, speed up transactions and mitigate transport fraud; And in the final use case, it will explore digital asset settlement and connect tokenized customer money to digital assets for seamless exchange.
Among the companies participating in the pilot are several prominent names in the financial and banking sector, including Barclays (Nasdaq: BCS), HSBC (Nasdaq: HSBC), Lloyds Banking Group (Nasdaq: Like), Natwest (NASDAQ: RBSPF), Nationwide and Santander (Nasdaq: San). They will be supported by the Infrastructure Company for Financial Services, the “Big Four” company EY and International Law Firm Linklaters.
“In the near future, the UK is likely to see the development and assumption of several forms of digital money and payments. We believe that commercial banks will have a role to play in all these forms,” said Ryan Hayward, head of digital assets on Barclays. “Bank deposits upgrade to a digital form will help ensure that commercial bank money remains central to the economy and customers continue to benefit from the protection and trust that goes together with that form of money.”
At the same time, Richard Hay, global co-head for fintech at Linklaters, described the pilots as “a significant step forward in the development of digital money in the UK.”
He added that “by enabling living transactions with tokenized sterling inserts, the industry utilizes technology to improve trust, security and efficiency over critical payment and decommissioning work flows.”
UK Finance said the pilot will enable commercial bank money to support the British government’s ambitions for growth and innovation, including the present Plans for a digital gilding (figure). This system, which was announced in March 2025, aims to enable the government to investigate how distributed the main book technology (DLT) can be applied across the life cycle for the UK’s government debt process, as well as “catalyzing the development of the UK’s based DLT infrastructure.”
In the future, the UK plans funding to host commitment and events throughout the pilot to give all stakeholders updates on the work and the next step.
The digital push
In recent years, UK Finance has made its ambitions to support digital development and innovation in space completed, with tokenization high on the agenda.
In September, before US President Donald Trump’s state visit to Britain, it was cosigned a letter To the British business secretary Peter Kyle and economic secretary for the Treasury Lucy Rigby and claims that distributed main book technology (DLT) should be a “core string” of a proposed “UK-USA Tech Bridge.”
The letter, also signed by several other leading trading groups, especially highlighted Stablecoins and tokenization As “strategically relevant and important sectors” for both the United States and the United Kingdom
It continued to emphasize the importance of DLT, noted that it “represents a technical transformation” and that “together with other new technologies, runs the next generation of financial services and infrastructure – improvement of capital flows, facilitates faster and cheaper payments, drives efficiency and productivity and broadening financial inclusion.”
In May also British financing Published Its response to HM Treasury’s draft regulatory regime for cryptoassettes, Published April 29th.
According to the draft rules, digital asset exchangesResellers and agents would be conducted under the UK’s regulation of financial services, and digital asset companies with UK customers would have to meet clear standards for openness, consumer protection and operational resilience – “just like companies in traditional financing,” said the Tax Chamber.
The British Chancellor of Tax, Rachel Reeves, too indicated that the rules would further adapt Britain to the United Stateswhich clearly ensures support for innovation and avoidance of heavy regulatory roadblocks to innovative technological development.
UK Finance welcomed Treasury’s intention to deliver the regulations for cryptoassettes and Stablecoins immediately, but warned the current preparation does not give sufficient clarity and “may result in a number of unintentional consequences and threatens to challenge growth and innovation in the UK’s growing digital assets space.”
Watch: Blockchain and Banking
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