Business
UK banks complete first tokenised deposit transfers
Livemint··2d ago
UK Finance said Lloyds, NatWest and Barclays completed the first interbank tokenised deposit transfers on September 24, Reuters reported from London. The banks ran two mortgage deals and HSBC tested a person-to-person marketplace payment. Tokenised deposits map commercial bank money onto blockchain rails. The Bank of England favours these regulated deposit trials over privately issued stablecoins.
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What It Means For You
- Mortgage and peer payment pilots test whether blockchain rails can move sterling between institutions.
- Regulators may watch whether tokenised deposits offer safer settlement than retail stablecoins.
- Separate bank-built chains had previously blocked cross-institution transfers industry-wide.
What's Happening
- UK Finance disclosed the mortgage transactions and HSBC's marketplace simulation to Reuters.
- Lenders have sought for more than a decade to tokenise deposits, stocks, bonds and currencies.
- Each institution's earlier standalone blockchain systems prevented money moving between banks.
BoE stance on digital money
- The Bank of England has encouraged tokenised deposit trials as an alternative to private stablecoins.
- Proponents argue bank-issued tokens keep settlement inside regulated commercial banking.
- Reuters reported the development in London and Paris on Wednesday.
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