Major UK banks execute world's first tokenized sterling transactions

Major U.K. banks executed the world's first interbank customer transactions using tokenized British pound deposits on a share platform. The money movement included remortgage payments. The tests included a consumer purchase. Tokenized deposits remain liabilities of the issuing banks. They retain conventional deposit protections. The project tests whether regulated bank money can move in tokenized form between institutions and in retail payments. Several banks used a common system for the deposits. This differs from a recent Lloyds initiative that used tokenized deposits to buy a tokenized gilt within its own arrangement. Barclays, HSBC, Lloyds Banking Group, Monzo, Nationwide, NatWest and Santander took part in the initiative. Quant built the platform. Quant provides distributed ledger technology services. The Bank of England and Financial Conduct Authority are preparing the U.K. financial system for tokenization and longer settlement hours. The regulators want to support tokenized markets. They are considering stablecoins for institutional settlement. The group will next test digital-asset settlement using tokenized customer money.