From the RLN to the UK tokenised sterling deposit pilot

The UK is running the most instructive experiment in bank money anywhere: a live pilot in which the country’s largest banks issue tokenised versions of ordinary sterling deposits and settle them on shared programmable infrastructure. Announced by UK Finance on 26 September 2025 and running until mid-2026, the pilot brings together Barclays, HSBC, Lloyds Banking Group, NatWest, Nationwide, and Santander, later joined by Monzo, with Quant Network as the technical backbone.

To read the pilot correctly, you need its lineage, because it is the third act of a story that began as a question about whether regulated money could live on shared ledgers at all.

Act one and two: the Regulated Liability Network

The Regulated Liability Network was the finance industry’s structured answer to an awkward observation: token markets were being built around unregulated money while regulated money, central bank reserves and commercial deposits, stayed on infrastructure from another era. The RLN concept put both on a shared programmable ledger, each liability remaining exactly what it was legally.

The New York Fed’s innovation center published proof-of-concept findings in July 2023, concluding the concept was technically feasible for dollar settlement. The UK took it further: in September 2024, UK Finance announced the successful outcome of the UK’s RLN experimentation phase, with the banks that would later populate the pilot among the participants and Quant delivering the platform’s first phase. Experimentation proved the concept; the question became what customers would actually get from it.

Act three: live tokenised sterling

The pilot answers with three deliberately unglamorous use cases. Marketplace payments, where a tokenised deposit can be locked until goods arrive, attacking purchase fraud with conditional settlement rather than after-the-fact refunds. Remortgaging, where conveyancing funds move transparently between firms instead of through opaque client-account chains. And the settlement of tokenised assets such as wholesale bonds, where a tokenised deposit provides the cash leg against a tokenised security, delivery versus payment enforced in the settlement itself.

Note what all three share: the money involved is ordinary bank deposits. No new instrument, no separate reserve pool, no issuance regime. The deposit stays on the bank’s balance sheet and the customer’s claim stays on their own bank, preserving the singleness of money that central bankers have repeatedly said any digital cash must protect.

The policy backdrop

The pilot is not happening in a vacuum. UK Finance frames tokenised sterling deposits as part of the country’s push toward next-generation money and payments, sitting alongside the National Payments Vision and the government’s digital gilt programme, known as DIGIT, which would give tokenised bank money a sovereign asset to settle against. The sequencing matters: a tokenised deposit needs somewhere to be useful, and a tokenised gilt needs a cash leg. Each initiative strengthens the case for the other, which is why the same names recur across both efforts.

The design also answers a question regulators have asked loudly since stablecoins arrived: how to get the benefits of programmable money without fragmenting the money itself. The Bank for International Settlements and national central banks have consistently favored arrangements in which digital cash remains a claim on a regulated institution, redeemable at par, indistinguishable in value from every other pound. Tokenised deposits pass that test by construction. The pilot is, among other things, the UK banking industry demonstrating to its supervisors that innovation and singleness can coexist, and doing so while the FCA’s stablecoin regime, its final rules published in June 2026 but not yet in force, defines the alternative path.

There is a competitive reading too. UK banks watched J.P. Morgan and Citi build single-bank token networks and drew the obvious lesson: a lone tokenised deposit is only useful inside its own bank, but a standard shared across seven institutions covering most UK current accounts could become national infrastructure. Going together is slower than going alone. It is also the only version that produces a network rather than another island.

What the pilot signals

Three things, each larger than the pilot itself. First, incumbent banks have picked their instrument: when given a choice between issuing stablecoins and tokenising deposits, the UK’s largest banks chose tokenized deposits, for the same balance-sheet and regulatory reasons driving JPMorgan’s JPMD and Citi’s token services, mapped in our deposit token landscape. Second, the industry-consortium shape matters: unlike a single-bank network, the pilot has multiple banks settling on shared infrastructure from the start, a structural difference from the islands problem that defines the single-bank efforts. Third, it is still a pilot, and honest observers should say so. It runs to mid-2026 within controlled use cases; what launches afterward, and how widely, is not yet decided.

What the pilot does not solve is everything beyond sterling. A UK corporate’s payment to a supplier in Singapore still crosses currencies, jurisdictions, and rails the pilot does not touch. The world the pilot is building toward is one more excellent, partial network on a map already full of them.

Where Frame fits

Frame is the settlement layer for global finance: one integration to orchestrate payments at scale across fiat rails, stablecoins, and tokenized deposits, with compliance enforced on every transaction and settlement in seconds instead of days.

Tokenised sterling deposits are exactly the kind of rail Frame exists to span. A rail-neutral settlement layer routes each payment across whichever venue fits the corridor, the counterparty, and the governing policy: a tokenised deposit where both parties’ banks support one, a fiat network or regulated stablecoin where they do not, with Frame’s Rules Engine enforcing the policy inside settlement and every transaction producing verifiable evidence its conditions were met. For banks, payment providers, exchanges, platforms, and enterprises, the pilots multiplying around the world are not a menu to choose one item from. They are the reason a layer above them exists.

See how a rail-neutral settlement layer spans networks like these: the Frame Blueprint.