UK banks working on a new kind of pound
Key Points
- Seven UK banks are building a blockchain version of the pound under the GBTD project led by UK Finance
- Treasury minister Lucy Rigby backed the work in a speech on Tuesday (8 September)
- Tokenised deposits keep normal bank protections but settle instantly on a shared ledger
- Bank of England stablecoin rules will allow regulated sterling stablecoins from 2027
- 16 firms are now in the government's Digital Securities Sandbox, with the first live approval granted
Barclays, HSBC, Lloyds, NatWest, Nationwide, Santander and Monzo are building a blockchain version of the pound, and the Treasury said on Tuesday (8 September) that the work is now part of a national plan to move the City onto digital rails.
Economic Secretary to the Treasury Lucy Rigby made the remarks in a speech to banking trade body UK Finance, which is coordinating the project under the name Great British Tokenised Deposits, or GBTD.
“In particular, I wanted to recognise the efforts of UK banks in progressing the Great British Tokenised Deposit initiative, working with UK Finance to bring tokenised sterling deposits into the UK market,” said Rigby.
A tokenised deposit is ordinary money sitting in a bank account, recorded on a blockchain rather than on the bank’s own internal ledger.
The pound in the account stays a normal bank deposit with the same legal protections, but it can move between banks and settle instantly around the clock.
UK Finance launched the live pilot in September 2025 with six of the country’s biggest banking groups, and Monzo has since joined the project. Blockchain firm Quant Network built the shared platform, with EY and Linklaters advising.
The pilot set out to test three uses for the digital pound:
- Payments on online marketplaces;
- Speeding up remortgaging;
- Settling trades in tokenised bonds and shares.
Lloyds completed the UK’s first transaction using a tokenised deposit on a public blockchain in January 2026 as part of the programme.
The platform also offers what UK Finance called tokenisation-as-a-service, so smaller banks and building societies without their own blockchain systems can plug in.
Rigby said the bank deposit work runs alongside the Bank of England’s new stablecoin rules, and both are meant to give traders a way to pay for tokenised assets without leaving the blockchain.
The Bank of England published its final policy and draft rules for systemic sterling stablecoins on 22 June 2026, clearing the way for regulated stablecoins to operate in the UK from 2027 with an initial issuance cap of £40 billion per coin.
The Treasury minister said the wider push to digitise London’s markets has moved from the fringes to the mainstream. “The debate isn’t whether wholesale markets will become tokenised; it’s when,” said Rigby.
She pointed to 16 firms now taking part in the Digital Securities Sandbox, the government’s testing ground for trading tokenised shares and bonds under relaxed rules, with the first firm already approved for live activity.
The government also confirmed its first blockchain government bond, known as DIGIT, will be issued in the first quarter of 2027.
Rigby added that the Treasury will work with the industry this autumn to map the changes to UK law needed for tokenised securities to trade outside the sandbox, using existing legislative powers where it can.
