Barclays, HSBC, and Citi, along with other U.K. financial institutions, are collaborating on a pilot project to test tokenized deposits for improved tracking of banking payments. The British trade association UK Finance announced on Apr. 15 that these banks are launching the “UK Regulated Liability Network” experiment using a shared ledger to streamline cross-border transactions.

The goal of this initiative is to enhance customer experiences with new payment functionalities and reduce fragmentation in retail payment markets. Barclays’ Chief Technology Officer, Lee Braine, expressed optimism about the potential insights gained from these experiments.

Participating firms, including banks, Quant, Mastercard, NatWest, Nationwide, and others, are expected to utilize the trial platform for two to three years before commercial implementation. The pilot project, scheduled to run until the summer of 2024, will focus on assessing customer and business benefits, technical feasibility, and legal frameworks related to shared ledger settlement systems.

Although it is unclear if the shared ledger is being developed on an existing blockchain network, other entities are exploring the integration of tokenization services with existing products. For example, Hong Kong’s GF Securities recently made headlines by launching a local tokenized commercial paper on the Ethereum blockchain, marking a significant milestone in the local digital asset ecosystem.

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