UK Finance, the representative body for over 300 financial services firms in the UK, has embarked on a groundbreaking pilot project aimed at exploring tokenized sterling deposits (GBTD). The initiative, announced on Friday, focuses on creating a digital representation of traditional British pound commercial bank money.
The pilot program will involve six major UK banks: Barclays, HSBC, Lloyds Banking Group, NatWest, Nationwide, and Santander. UK Finance aims to keep the pilot running until mid-2026, during which it will assess how tokenization could enhance customer experience, improve payment processes, prevent fraud, and streamline settlement procedures.
Collaborative Infrastructure with Quant Network
To facilitate its GBTD infrastructure, UK Finance has partnered with Quant Network, a platform known for its blockchain interoperability solutions based in the UK. This collaboration builds upon Quant’s successful involvement in the first phase of the Regulated Liability Network (RLN), which UK Finance initiated in 2024.
The RLN project has seen participation not only from the banks involved in the GBTD pilot but also from a variety of significant financial players, including Citi, Mastercard, Standard Chartered, Virgin Money, and Visa.
Key Use Cases in Focus
The pilot for tokenized deposits will explore three specific use cases: digital payments for online marketplaces, remortgaging processes, and wholesale bond settlements. According to Gilbert Verdian, founder and CEO of Quant, the GBTD project aims to pave the way for new forms of programmable money, thereby transforming the dynamics of value transfer and management.
“Our involvement underscores Quant’s leadership in digital finance, as we collaborate with the UK’s leading institutions to construct the infrastructure that will drive tomorrow’s economy,” Verdian stated.
Regulatory Landscape and Future Developments
The initiation of the tokenized deposits pilot coincides with the Financial Conduct Authority (FCA) working to finalize its regulatory framework for cryptocurrencies, which is anticipated to be implemented by 2026. In a policy note released in April 2025, the UK Treasury outlined a clear distinction between various financial instruments, including stablecoins, tokenized deposits, and electronic money.
Despite the FCA’s recent acceleration of crypto approvals in response to external pressures, effective regulation remains a work in progress. Meanwhile, the European Union continues to advance its Markets in Crypto-Assets (MiCA) regulation, which broadly covers various aspects of tokenization but does not extend its scope to tokenized deposits, which fall under traditional banking regulations.
As the pilot moves forward, the focus will likely remain on how these new technologies can integrate with existing financial systems and enhance overall economic efficiency. The collaboration between UK Finance and Quant Network signals a robust commitment to innovation in the British financial landscape, exploring not just modern payment solutions but also the future of programmable finance.
