Multiple major British banks, including Barclays, participated in a trial to test tokenized deposits, as reported by Bloomberg. The trial began in February and also included Mastercard and Visa, the largest credit card networks globally.
The commercial use of this technology is not anticipated anytime soon, with the experiment set to continue for up to three years. The initial insights from the ongoing trial are expected to be disclosed in late summer.
There is a growing interest in tokenization in the UK as a government-backed technology group recently advised local companies to explore this innovative technology to enhance the efficiency of the banking industry. The group has also urged regulators to establish transparent tokenization regulations.
The Bank for International Settlements (BIS) introduced a tokenization project called Agora to address the main issues with cross-border payments. Central banks such as the Bank of Japan and the Bank of France are early participants in this initiative.
Agora is part of the BIS's 2024 Innovation Hub work program, which also includes Project Aurum focusing on the privacy component of retail CBDCs.
Meanwhile, the future of the "digital pound" or "Britcoin" seems uncertain, as recent reports suggest. The Bank of England started exploring this concept as far back as 2021.
