In a significant move towards mainstream adoption of digital finance, UK Finance, the trade association representing over 300 financial services firms in the United Kingdom, has announced the launch of a pioneering pilot project for tokenized sterling deposits (GBTD). This initiative aims to create a digital form of traditional British pound bank money, signaling a step forward in integrating blockchain technology into the countryโs financial infrastructure. The project emphasizes enhancing payment efficiency, reducing fraud, and improving settlement processes, with a broader vision of transforming the UKโs financial ecosystem.
- UK Finance has launched a pilot for tokenized sterling deposits, involving six major UK banks.
- The project explores the use of blockchain interoperability to modernize traditional banking services.
- Quant Network provides the infrastructure, building on its experience with the UKโs Regulated Liability Network (RLN).
- The pilot will focus on online marketplace payments, remortgaging, and bond settlements.
- UK’s crypto regulatory framework is expected to be finalized in 2026, shaping future digital asset policies.
UK Financeโs initiative, announced on Friday, marks a notable step towards integrating digital assets within the UK banking system. The pilot involves collaboration with six leading banks, including Barclays, HSBC, Lloyds, NatWest, Nationwide, and Santander. The goal is to explore how tokenized deposits can offer improved control over payments, bolster security against fraud, and streamline settlement protocols, ultimately aiming to benefit consumers, businesses, and the wider economy.
Quant Network to provide infrastructure
The underpinning infrastructure for the GBTD project will be supplied by Quant Network, a UK-based firm specializing in blockchain interoperability solutions. Quantโs involvement follows its successful delivery of the initial phase of the Regulated Liability Network (RLN), a collaborative effort for shared ledger-based financial market infrastructure launched earlier this year.
This project engaged the six participating banks alongside global giants like Citi, Mastercard, Standard Chartered, Virgin Money, and Visa, underscoring the projectโs significance in shaping future financial infrastructure.
Three key use cases
The pilot will examine three primary applications: payments within online marketplaces, processes for remortgaging, and wholesale bond settlements. According to Gilbert Verdian, CEO of Quant Network, this initiative aims beyond mere payment improvements; it seeks to enable new programmable money paradigms that could revolutionize how value is transferred and managed in the financial system.
Verdian emphasized, โOur involvement underscores Quantโs leadership in digital finance, as we work alongside the UKโs leading institutions to build the infrastructure powering tomorrowโs economy.โ
UK crypto regulation update
The launch coincides with the UKโs efforts to formalize crypto regulations. The Financial Conduct Authority (FCA) is finalizing its crypto regulatory framework, with full implementation expected in 2026. A policy note published in April of 2025 clarified distinctions between stablecoins, tokenized deposits, and electronic money, setting the stage for a well-regulated crypto environment.
Amid growing regulatory clarity, the FCA has been accelerating its crypto approval processes, responding to previous criticisms, as the UK prepares to adopt comprehensive guidelines for digital assets next year. Meanwhile, the European Union continues to enforce the Markets in Crypto-Assets (MiCA) regulation, which came into effect in late 2024. While MiCA covers a broad range of crypto-assets, tokenized deposits remain governed under existing banking and deposit laws.
