Britain’s biggest banks have completed interbank transfers using tokenised deposits, moving bank money on blockchain rails within the regular banking system rather than through stablecoins. Lloyds, NatWest and Barclays conducted two mortgage-related transactions, while HSBC and two other lenders tested a simulated online marketplace purchase in which programmable deposits held funds until goods were confirmed received. The trials form part of UK Finance’s Great British Tokenised Deposit project and reinforce the Bank of England’s preference for bank-issued tokenised deposits over privately issued stablecoins. Tokenised deposits remain liabilities on banks’ balance sheets and retain the legal status of ordinary deposits, while stablecoins are generally issued by private companies outside the banking system. BoE Governor Andrew Bailey has warned that bank-issued stablecoins could pose financial-stability risks, and the central bank has retained an issuance cap while easing other restrictions this year. UK Finance plans to establish a company and governing rulebook, with participating lenders aiming to issue three digital bonds in the first quarter of 2027 that can be traded and settled using tokenised deposits. Jana Mackintosh said interest from other jurisdictions had increased over the past year, while the United States’ The Clearing House announced a separate interbank tokenised-deposit project in June.