Seven major UK banks have completed their first live customer transactions using tokenised sterling deposits, marking a new development in the country's digital payments and financial-services sector.

The transactions were carried out through the Great British Tokenised Deposit (GBTD) initiative, convened by UK Finance and involving Barclays, HSBC UK, Lloyds Banking Group, Monzo, Nationwide, NatWest and Santander.

The pilot included two remortgage completions, where funds were locked and then automatically released when the agreed completion conditions were met. The process is designed to reduce manual checks and settlement delays.

A separate consumer marketplace transaction also tested programmable payments. In that case, funds could remain locked until the purchased goods were successfully exchanged, demonstrating how tokenised deposits could be used for conditional payments and online commerce.

Tokenised deposits are digital representations of conventional commercial bank money. UK Finance says they can provide programmability, faster settlement and greater payment efficiency while retaining the regulatory protections associated with traditional bank deposits.

Further pilots are expected to explore digital-asset settlement, potentially expanding the technology's applications across UK financial services.