Seven of the U.K.'s largest banks completed the world's first customer transactions using tokenized British pound deposits on a shared platform, according to an announcement on Thursday.
The money movement included remortgage payments and a test of a consumer purchase. The project is testing whether regulated bank money can move in tokenized form between institutions and support retail payments. This differs from a recent initiative by Lloyds to use tokenized deposits to buy a tokenized gilt within its own arrangement, since the new trial involves deposits moving across a common system shared by several banks.
Barclays, HSBC, Lloyds Banking Group, Monzo, Nationwide, NatWest and Santander took part in the Great British Tokenized Deposit initiative. The platform was built by Quant, a distributed ledger technology (DLT) service provider.
The tests come as the Bank of England and Financial Conduct Authority prepare the U.K.'s financial system for tokenization and longer settlement hours. Regulators want to support tokenized markets while considering stablecoins for institutional settlement.
The group will next test the settlement of digital assets using tokenized customer money, according to the announcement.
