UK banks make first interbank transactions using tokenised deposits

In the simulated online purchase, programmable deposits allowed funds to be set aside in the buyer's account and released to the seller only once the goods had been received, something which Jana Mackintosh, UK Finance's managing director for Payments and Innovation, said showed the technology could lower fraud risks. While money moved between accounts, no real goods changed hands in the test.

Banks also completed two remortgage transactions using tokenised deposits, where locked funds were released automatically once the property transaction was completed.

The project now plans to establish a company and develop a rulebook and governing framework to support the move from pilot into full production, and the banks involved plan to issue three digital bonds in the first quarter of 2027 that can be traded and settled with tokenised deposits, Mackintosh added.

“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,” she said, citing conversations with counterparts in Europe.