What happened?
UK Finance kicked off a two-year pilot for tokenized sterling deposits (GBTD) with six major banks and Quant Network to build the technical backbone. The trial, running until mid-2026, will test programmable commercial bank money for payments, remortgaging and wholesale bond settlement. It builds on the Regulated Liability Network experiments and aims to modernize the UK’s payments and settlement infrastructure.
Who does this affect?
The project directly involves big banks (Barclays, HSBC, Lloyds, NatWest, Nationwide, Santander) and fintechs like Quant, plus market infrastructure providers. It also impacts businesses and consumers using payments and mortgage services, and institutional investors trading bonds and tokenized assets. Regulators and new market entrants will be affected too, since the pilot relies on private‑public collaboration and could change access to financial plumbing.
Why does this matter?
If it works, tokenized sterling could speed up settlements, cut fraud and reduce the cost of failed transactions while enabling programmable money and new services. That efficiency could unlock liquidity and attract institutional capital into tokenized real‑world assets, helping initiatives like digital gilts and LSEG’s token platforms scale. The market impact could be significant—lower costs, more innovation and deeper markets—but wider adoption hinges on clear rules, reliable tech and investor trust.