Tokenized deposits have reached the point where banks can begin finding out what works and what needs work.

Seven banks in the United Kingdom participated in the first live customer transactions using tokenized sterling deposits, including two remortgage completions and a consumer marketplace purchase, according to a Thursday (Sept. 24) press release. The transactions were executed on the shared Great British Tokenised Deposit (GBTD) platform developed by Quant.

The same day, in the United States, The Clearing House said it selected Quant for its On-Chain Money Initiative, PYMNTS reported. The planned network will allow financial institutions to clear and settle tokenized deposits and connect them to existing fiat payment systems, with availability expected for participating institutions in the first half of 2027.

Moving that money among banks creates a different set of challenges along the path toward scaling tokenized deposits.

A dollar in a checking account does not become less useful because its recipient uses another bank. Tokenized deposits eventually need the same practical quality.

The U.K. transactions showed that participating banks can move tokenized deposits between institutions. The Clearing House is pursuing the same objective in the U.S., where its network would allow tokenized commercial bank money to move among participating banks while the corresponding funds settle between them.

For corporate customers with several banking relationships, tokenizing cash provides limited benefit if the result is a collection of digital balances confined to individual institutions.

The test for interoperability is one where customers can treat tokenized deposits as bank money rather than as proprietary bank products.

Source link