Banks Connect Tokenized Deposits
U.K. and U.S. banks test tokenized deposits for live transactions.
In brief
U.K. and U.S. banks test tokenized deposits for live transactions. Seven U.K. banks completed live tokenized deposit transactions, with The Clearing House building a U.S. network for tokenized deposits by early 2027. Originally reported by Pymnts.
First Live Tokenized Transactions
Seven U.K. banks completed live customer transactions using tokenized sterling deposits, including two remortgage completions and a consumer marketplace purchase.
“The transactions were executed on the shared Great British Tokenised Deposit (GBTD) platform developed by Quant”
U.S. Network for Tokenized Deposits
The Clearing House selected Quant for its On-Chain Money Initiative to build a U.S. network clearing tokenized deposits by early 2027.
“The planned network will allow financial institutions to clear and settle tokenized deposits and connect them to existing fiat payment systems”
Interchangeability Challenge
Tokenized deposits must become interchangeable across banks to function as practical money rather than proprietary products.
“The U.K. transactions showed that participating banks can move tokenized deposits between institutions”
Conditional Payments
Tokenized deposits enable conditional transactions, such as locking funds until remortgage completion or goods exchange.
“For the remortgages, funds remained in customer accounts until completion conditions were satisfied”
Liquidity Management
Continuous settlement requires 24/7 liquidity to fund tokenized deposits, including outside conventional banking hours.
“For banks, that convenience requires liquidity to be available when the instruction arrives, including outside conventional banking hours”
Accounting Delays
Faster settlement does not guarantee faster accounting as transactions still require manual reconciliation with ledgers and systems.
“For corporate customers, faster settlement is of lesser value if treasury staff still must identify transactions manually”
The key point
Seven U.K. banks completed live tokenized deposit transactions, with The Clearing House building a U.S. network for tokenized deposits by early 2027.
