UK banks moved one step closer to making tokenised sterling deposits part of day-to-day payments, as industry body UK Finance began a live pilot running to mid-2026.
The selected group, London-based Quant, will deliver the programmable money infrastructure. Participating lenders include HSBC, Lloyds, NatWest, Barclays, Nationwide, and Santander.
The pilot will test tokenised deposits in three flows:
- Person-to-person marketplace payments, where conditional and escrow-like logic can mitigate scams.
- Remortgaging workflows that coordinate funds release and identity checks among conveyancers and lenders.
- Wholesale asset settlement using instant delivery-versus-payment that synchronises cash and securities.
Prior work under the UK Regulated Liability Network showed legal DvP with automated synchronisation of tokenised deposits, tokenised assets, and wholesale central bank money.
Programmable money
The choice of tokenised deposits reflects the policy preference to keep innovation inside the banking perimeter. Bank of England governor Andrew Bailey said in July he could not see the need for bank-issued or third-party stablecoins relative to tokenisation of deposits, and the Financial Conduct Authority’s stablecoin regime is not expected to be finalised until the end of 2026.
UK Finance’s RLN work also concluded that programmability could reduce failed payments, lower fraud, and streamline home-buying processes.
Quant says it will provide the programmable money layer for live tokenized deposit transactions, with interoperability across bank ledgers and UK payment infrastructure, including RTGS/CHAPS, Faster Payments, Open Banking interfaces, and tokenized-deposit platforms.
The company’s stack includes Overledger, its interoperability platform, and PayScript for programmable payment logic, with materials describing how tokenised deposits can enable conditional payments, atomic settlement and cross-network orchestration.
UK Finance’s RLN documentation sets out the cross-ledger design that the pilot is building toward, including shared-ledger orchestration and foundational capabilities for programmability.
Forward-looking effects are most visible in fraud economics, settlement costs, and working-capital timing. UK retail payments fraud continues to be dominated by authorized push-payment scams and marketplace fraud, and programmability can embed funds-release conditions and verified counterparties.
Pilot impact and mechanisms
UK Finance’s latest annual fraud data put total cases and losses on an upward path into 2025, while highlighting remote-purchase and impersonation typologies.
On costs and throughput, large-bank surveys find material savings once programmable money and tokenisation are embedded in payment operations and corporate payables, according to Deloitte.
The UK’s sovereign-debt digitisation track, including a pilot digital gilt instrument, is also moving in parallel and would complement bank tokenisation if settlement finality is tested on-chain.
| Mechanism | What changes with tokenised deposits | Illustrative range, next 12–24 months |
|---|---|---|
| Marketplace P2P payments | Conditional release and escrow-like logic reduce successful scam completion rates by controlling funds availability | 5–15% reduction in APP scam losses in flows adopting conditional release |
| Corporate payments ops | Embedded rules for cash application, invoice checks and cut-off scheduling reduce exceptions and reconciliation work | 5–10% lower internal processing cost per transaction at scale |
| Remortgaging completion | Synchronised funds and title updates cut idle time and reduce conveyancing fraud exposure | Hours to sub-day completion for funds movements in controlled pilots |
| Wholesale DvP settlement | Atomic settlement for cash and tokenised securities, shared liquidity management | T+0 in pilot environments, with staged liquidity controls |
| Policy and standards context | National roadmap for next-gen payments and digital markets supports bank-led digital money experiments | Regulatory deliverables mapped to 2025–26 work program |
Execution depends on interoperability across ledgers and schemes, which the pilot is designed to test. UK Finance’s RLN work describes a multi-issuer platform and orchestration layer that interacts with different forms of money and existing rails.
HSBC’s head of global payments solutions said the strongest client demand is in cross-border applications, even as the first tests are domestic, and noted that bank-to-bank interoperability has limited potential to date.
The work also fits the UK’s policy program. The National Payments Vision sets the direction for a trusted, next-generation payments ecosystem with a clear regulatory framework and resilient infrastructure.
On capital-markets rails, the government and DMO are preparing a pilot digital gilt instrument, which would test on-chain issuance and settlement within the Digital Securities Sandbox. At the European level, the ECB’s July 2025 progress report confirms continued work on conditional payments and scheme rulebooks, relevant if banks seek future settlement in central bank money for retail use cases.
If the GBTD pilot proves shared programmability across retail and wholesale flows, production rollouts would begin where programmable conditions and synchronised settlement add the most value: high-risk P2P marketplace flows, mortgage completions, and selected DvP asset settlements. Bank-to-bank interoperability and fraud controls would be embedded from day one.
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