PANews reported on September 26th that the UK's largest lenders are moving forward with plans to launch tokenized versions of customer deposits next year, according to Global Markets. This move by the banks responds to Bank of England Governor Andrew Bailey's call for tokenization technology to be prioritized over stablecoins. The UK Finance Association revealed on Friday that HSBC, NatWest, Lloyds Bank, and others have launched pilot projects using tokenized deposits for payments through online marketplaces. The UK tokenized deposit pilot, which also involves Barclays, Nationwide Building Society, and Santander, will run until mid-2026. The pilot will also test the use of tokenized deposits in mortgage refinancing and digital asset settlements.

Although the UK's Financial Conduct Authority (FCA) isn't expected to finalize stablecoin regulations until the end of 2026, the Bank of England has made it clear that banks can experiment with tokenized deposits within the existing regulatory framework. Currently, several major banks are simultaneously researching tokenized deposits and stablecoins. Citigroup's CEO stated in July that tokenized deposits could potentially surpass stablecoins in importance.