---
title: Lloyds, NatWest and Barclays Complete First Remortgages Paid in Tokenised Sterling Deposits
description: Banks in the seven-member GBTD pilot have used tokenised sterling deposits for live customer payments, including two remortgage completions.
author: Darie Nani (Editor-in-Chief)
date: 2026-09-27T12:58:45.991Z
updated: 2026-09-27T12:58:46.001Z
canonical: https://www.sovereignmagazine.com/article/uk-banks-tokenised-deposits-first-remortgages
image: https://cdn.nanimediahouse.com/pexels-a-stunning-view-of-london-s-famous-skyscraper-amid-historic--19121462.jpg
categories: FinTech
content_type: News
region: United Kingdom
publication: Sovereign Magazine
schema_type: Article
---

Lloyds, NatWest and Barclays have used tokenised sterling deposits to complete two remortgages, UK Finance told Reuters. The banking trade body said on 24 September that the remortgages, together with a marketplace payment run by a separate group of banks, were the first live customer transactions using tokenised sterling deposits.

The payments ran under the Great British Tokenised Deposit (GBTD) initiative, which UK Finance convenes and whose members are Barclays, HSBC UK, Lloyds Banking Group, Monzo, Nationwide, NatWest and Santander. A tokenised deposit is a blockchain-based version of the money in a bank account, and it can be programmed to move only when set conditions are met. UK Finance says tokenised deposits keep the regulatory protections of a conventional deposit.

Banks have spent more than a decade trying to bring blockchain into their own IT systems, Reuters reported, but because each lender developed its own system, the tokens could not move between institutions. The GBTD transactions ran on a single platform shared by all seven banks, developed by Quant, with project management from EY and legal advice and rulebooks from Linklaters. Lloyds recently used tokenised deposits to buy a tokenised gilt, but that deal ran within Lloyds' own arrangement rather than across several banks.

## Locked Funds Were Released Automatically When Each Remortgage Completed

In both remortgages the deposit funds were locked and then released automatically at completion, which UK Finance says reduces manual checks and settlement delays. UK Finance says the technology can also let customers keep earning interest on funds held in their accounts until the deal completes. The banks also looked at how a digital connection to HM Land Registry could speed up future property transactions.

The size of the loans and the dates of the transactions have not been disclosed. Gilbert Verdian, founder and chief executive of Quant, said: "These transactions are real money moving on UK infrastructure, not an experiment."

## HSBC and Two Other Banks Tested a Payment Released Only on Delivery

A trio of banks including HSBC ran the third transaction, Reuters reported: a consumer buying an item from a private seller, in which, UK Finance says, the money was locked in the buyer's account and released only when the goods were exchanged. Real money moved between the accounts, though no real goods changed hands in the test. Jana Mackintosh, UK Finance's managing director of payments and innovation, said the arrangement showed the technology could lower fraud risk.

> "These live transactions show how tokenised deposits can deliver practical, real-world benefits and contingent payments that give customers greater control over their money."
> — Jana Mackintosh, Managing Director of Payments and Innovation, UK Finance

## The Bank of England Wants Banks to Tokenise Deposits and Issue Stablecoins Only From Separate Companies

The Bank of England has said it would rather banks innovate with tokenised deposits than with stablecoins, crypto tokens pegged to the dollar or another currency, Reuters reported. A tokenised deposit has the same legal status as money held in a bank account, while a stablecoin is usually issued by a private company and takes money out of the banking system, which raises concerns about the cost of credit.

Sarah Breeden, a deputy governor of the Bank, said in a [speech at City Week in May](https://www.bankofengland.co.uk/speech/2026/may/sarah-breeden-speech-at-city-week-the-future-of-money-in-a-digital-world): "We continue to expect banks to innovate in tokenised deposits, and our work on next-generation retail infrastructure will ensure those deposits can be used for payments between banks, not just among customers of the same bank." Breeden said banking groups can still issue stablecoins, but only from a separate group company that does not take deposits.

Breeden also said the Bank wants "a multi-money system that promotes competition and choice between robust forms of money" for retail payments, in which people could pay with tokenised bank deposits, regulated stablecoins and potentially a digital pound. Chris Woolard, the UK Digital Markets Champion, called GBTD "an exceptionally important initiative to the UK" and part of "moving the UK to a multi-money, multi-asset system".

In June the Bank published [draft rules for systemic stablecoins](https://www.bankofengland.co.uk/news/2026/june/boe-launches-policy-statement-and-draft-rules-on-regulating-systemic-stablecoins), under which issuance of each coin is initially capped at £40 billion. The Bank intends to finalise its code of practice by the end of 2026, allowing regulated stablecoins to operate in the UK from 2027.

## Three Digital Bonds Settled in Tokenised Deposits Are Planned for Early 2027

UK Finance launched the live pilot in September 2025 with six banks, and Monzo joined as the seventh in January. The project now plans to set up a company and write a rulebook and governing framework so it can move from pilot into full production, Mackintosh told Reuters.

The banks plan to issue three digital bonds in the first quarter of 2027 that can be traded and settled with tokenised deposits, with coupons also paid in tokenised deposits. UK Finance expects further pilots in the next few months in which tokenised customer money is exchanged directly for digital assets.

"In the last 12 months, other jurisdictions have been speaking to us in earnest about what we've done, trying to understand how they can now catch up," Mackintosh said, citing conversations with counterparts in Europe. In the United States, The Clearing House, a banking association and payments company, announced an interbank tokenised deposit project in June.

## FAQ

**Q: What is the difference between a stablecoin and a tokenised deposit in practice?**
The main difference for a customer is protection. A tokenised deposit is still money held at a bank, whereas stablecoins issued by banking groups will not be covered by deposit insurance, Breeden said in May, and the Bank expects them to carry branding distinct from the group's deposits so customers can tell the two apart. Under the Bank's June draft rules, a systemic stablecoin must be backed by reserve assets, with up to 70% in short-term UK government debt and the rest in deposits at the central bank.

**Q: Is the UK introducing a digital pound?**
The Bank of England says it will decide in 2026 whether to proceed with a digital pound, a retail central bank digital currency. Breeden said in May that the Bank and HM Treasury would set out the conclusions of their design work later this year. A digital pound would be issued by the central bank, whereas tokenised deposits are commercial bank money.

**Q: Where else are banks using tokenised deposits?**
Outside the UK, Partior, a blockchain-based interbank payment network, said in July 2024 that DBS, J.P. Morgan and Standard Chartered were using it to make payments for their customers, and that it was live in US dollars, euros and Singapore dollars. Separately from GBTD, Lloyds has completed three live tokenised deposit transactions in sterling, euro and Swiss franc scenarios under Project Agorá, a Bank for International Settlements project in which the Bank of England also takes part.