The UK bank is one step closer to making some of its tokenized Sterling deposits part of its daily payments as the industry group UK Finance launched a live pilot running until mid-2026.
The selected group, London-based Quant offers a programmable money infrastructure. Participating lenders include HSBC, Lloyds, Natwest, Barclays, Nationwide and Santander.
The pilot tests the tokenized sediment in three flows.
- Market payments from person to person, where logic like conditional and escrow can mitigate fraud.
- A workflow that coordinates fund release and identity checks between carriers and lenders.
- Wholesale asset settlements using immediate delivery vs. payments that synchronize cash and securities.
Previous work based on the UK Regulatory Liability Network showed legal DVP with automatic synchronization of tokenized deposits, tokenized assets, and wholesale central bank money.
Programmable Money
The selection of tokenized sediment reflects policy preferences to maintain innovation within bank boundaries. Bank of England Gov. Andrew Bailey said in July that he could not recognize the need for bank-issued or third-party stubcoins compared to deposit tokenization, and that the financial conduct authorities’ stubcoins scheme is not scheduled to be finalized until the end of 2026.
The RLN work of Finance in the UK concluded that programmers can reduce failed payments, reduce fraud and streamline the home buying process.
Quant says it will provide a programmable money layer for live tokenized deposit transactions with interoperability between banking plateaus and UK payment infrastructure, including RTG/Chaps, faster payments, open banking interfaces and tokenized decommissioning platforms.
The company’s stack includes Overledger, its interoperability platform, and PAYScript for programmable payment logic, and includes material explaining how tokenized deposits allow for conditional payments, atomic settlements, and network orchestration.
The UK Finance RLN document shows the design of the cross-ledger that pilots are building for.
The effects of future prospects are most noticeable in the economics of fraud, settlement costs, and financial timing. UK retail payment fraud continues to be dominated by approved push payment fraud and market fraud, with programmaticity that allows embedding fund release terms and verified counterparties.
Pilot impact and mechanisms
UK Finance’s latest annual fraud data has brought total cases and losses on the upward path through 2025, highlighting the typology of remote purchases and spoofing.
In terms of costs and throughput, we see that material savings are accumulated after programmable money and tokenization are embedded in payment operations and company payments.
UK sovereign debt digitization trucks, including pilot digital guilt equipment, are also running in parallel, complementing bank tokenization when periodic finality is being tested in the chain.
| mechanism | What changes with tokenized sediments | Description range, next 12-24 months |
|---|---|---|
| Marketplace P2P Payment | Logics like conditional releases and escrow reduce the success rate of fraud completion by controlling fund availability | 5-15% reduction in app fraud loss in flows adopting conditional releases |
| Corporate payment ops | Reduce Embedded Rules Exceptions and Settlement Work for Cash Applications, Invoice Checks, and Cutoff Scheduling | Internal processing costs per large transaction are reduced by 5-10% |
| Remortgaging completed | Synchronized funds and title updates reduce idle times and reduce communicative fraud exposure | Completion time up to time for controlled pilot fund movements |
| Wholesale DVP payment | Atomic reconciliation and shared liquidity management of cash and tokenized securities | In a pilot environment, T+0 with step-by-step liquidity management |
| Policy and Standards Context | National Roadmap for Next Generation Payments and Digital Markets Supports Bank-led Digital Money Experiments | Regulation artifacts mapped to the 2025-26 work programme |
The execution depends on the interoperability between the ledger and scheme that pilots are designed to test. UK Finance’s RLN work discusses multi-iser platforms and orchestration layers that interact with different forms of money and existing rails.
HSBC’s Global Payments Solutions head said that despite the initial testing being domestic, the strongest client demand lies in cross-border applications, noting that inter-bank interoperability is limited so far.
This work also fits the UK policy programme. The vision of national payments sets the direction of a reliable, next-generation payment ecosystem with a clear regulatory framework and resilient infrastructure.
On the capital market rail, the government and DMOs are preparing pilot digital guilt equipment. This tests issuance and settlements on the chain within a digital securities sandbox. At the European level, the ECB’s July 2025 progress report confirms on the ongoing work on conditional payments and scheme rulebooks related to cases where banks are seeking future settlements with central bank money for retail use cases.
If the GBTD pilot proves that they share programmerity across retail and wholesale flows, the production rollout starts where programmable terms and synchronous settlements add most value. Interbank interoperability and fraud management will be built in from day one.