UK banks pilot tokenised deposit transactions

Major UK banks have successfully completed the first live trials of 'tokenized' deposits. This technology moves money using blockchain-based systems rather than traditional slow-moving banking rails. While it sounds technical, the implications for retailers are significant. This pilot proves that programmable money is moving out of the lab and into the real world. For operators, this represents a major step toward instant settlement of consumer payments and financing disbursements. Currently, when a customer uses financing or a credit card, the merchant often waits days for the funds to clear. Tokenized deposits allow for near-instant movement of value 24/7, including weekends. This could eventually eliminate the 'lag' in cash flow that plagues small to mid-sized businesses. The pilot included giants like Barclays and Lloyds, signaling that the traditional banking system is preparing to compete with faster fintech alternatives. For your business, this technology could eventually lower transaction fees by removing intermediaries. It also opens the door for 'smart contracts.' Imagine a financing agreement where the lender’s payment is automatically released to you the exact second a delivery is confirmed via a tracking number. This level of automation reduces risk and speeds up your access to working capital.

Source: Finextra — Lending

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