UK Banks Pilot Tokenised Deposits to Test 'Smart Money' Applications

A group of major UK banks has launched a pilot program to test tokenised deposits, a digital form of sterling bank money designed to retain the protections of traditional deposits while offering enhanced efficiency and security.

The initiative, known as the GBTD pilot, is part of the Regulated Liability Network, a shared platform for innovation across multiple forms of money. Participants include Barclays, HSBC, Lloyds Banking Group, NatWest, Nationwide, and Santander, supported by technology and advisory partners Quant, EY, and Linklaters.

The pilot, running until mid-2026, will trial programmable payments across three use cases: person-to-person transactions on online marketplaces, remortgaging processes, and digital asset settlement. Each is intended to highlight potential benefits, such as reducing fraud, improving transparency, and enabling smoother exchanges between digital money and digital assets.

Ryan Hayward, head of digital assets at Barclays, said, "The upgrading of bank deposits to a digital form will help to ensure that commercial bank money remains central to the economy and customers continue to benefit from the protections and trust that go alongside that form of money."

Santander UK's chief payments officer, Paul Horlock, added that the pilot reflects a move toward a "multi-money future," where programmable features could give consumers greater confidence, security, and flexibility in payments.

The UK's approach is consistent with its National Payments Vision, which emphasizes modernizing infrastructure to support innovation while maintaining regulatory safeguards. The pilot's outcome could inform future steps toward broader adoption of tokenised money in the banking system.