Lloyds, NatWest and Barclays complete landmark blockchain-based mortgage transactions
Three of the UK’s largest banks have completed two live remortgage transactions using tokenised sterling deposits, marking a major step towards bringing blockchain-based payments into mainstream banking and property finance.
Lloyds Banking Group, NatWest and Barclays carried out the transactions as part of the Great British Tokenised Deposit (GBTD) initiative led by UK Finance, which is testing how tokenised commercial bank money can move between different financial institutions through a shared infrastructure.
The transactions form part of what UK Finance described as the first live customer transactions using tokenised sterling deposits, demonstrating how programmable bank money could reduce delays and manual processes in property transactions.
How blockchain changes the mortgage process
During the two remortgage transactions, funds held in customers’ accounts were digitally locked before completion and automatically released once the required conditions were met.
The model reduces the need for manual checks and could shorten settlement delays associated with conventional property transactions.
It also allows customers to continue earning interest on funds held in their accounts until completion, rather than moving the money out earlier in the process.
The pilot additionally explored how future integration with HM Land Registry could further automate parts of property transactions and improve settlement efficiency.
Tokenised deposits move between rival banks
The wider significance of the experiment extends beyond mortgages.
Banks have been experimenting with blockchain and tokenisation for years, but many projects have operated within separate systems developed by individual financial institutions.
The GBTD initiative is designed to demonstrate that tokenised deposits issued by different banks can operate across a common, interoperable infrastructure.
Tokenised deposits represent conventional commercial bank deposits in digital form. Unlike privately issued cryptocurrencies, they retain the legal and regulatory characteristics of money held in a traditional bank account while adding features such as programmability and conditional settlement.
The project brings together seven major UK financial institutions: Barclays, HSBC UK, Lloyds Banking Group, Monzo, Nationwide, NatWest and Santander.
Its technology platform was built by Quant, with EY providing project management and Linklaters developing the legal framework and rulebooks.
From mortgages to everyday payments
The banks also tested the technology in a person-to-person transaction designed to simulate a purchase through an online marketplace.
In that transaction, funds could be reserved in the buyer’s account and released to the seller only after predetermined conditions were met.
While actual money moved between bank accounts during the trial, no physical goods were exchanged.
The approach illustrates how programmable deposits could eventually be used to reduce fraud risks in digital commerce by linking the release of funds directly to the completion of a transaction.
Digital bonds are next
The project is now preparing to move beyond the pilot phase.
According to Reuters, participants plan to establish a company and develop a governance framework and rulebook that could support the transition towards full-scale commercial deployment.
The participating banks are also planning to issue three digital bonds in the first quarter of 2027, which could be traded and settled using tokenised deposits.
The development comes as financial institutions globally explore how blockchain infrastructure can be integrated into conventional banking without requiring customers to move their money into cryptocurrencies or privately issued stablecoins.
For the UK banking industry, the latest transactions provide an early real-world test of whether tokenisation can move beyond experimental financial-market projects and become part of everyday banking activities — from property finance to consumer payments.