UK Banks Pilot Tokenized Deposits, Aligning With Bank of England Preference

Major UK banks including Lloyds, NatWest, and Barclays have completed the first interbank transfers using tokenized deposits on blockchain rails. This initiative, part of the UK Finance Great British Tokenized Deposit project, supports the Bank of England's preference for bank-issued tokens over private stablecoins. Unlike stablecoins, tokenized deposits maintain the same legal status as traditional bank deposits and remain on the bank's balance sheet. The pilot also demonstrated programmable deposit use cases, such as secure online marketplace transactions, which officials suggest could reduce fraud risk.