Barclays, the U.K.'s second-largest bank by market capitalization, said it invested in Ubyx, a U.S. startup developing clearing systems for tokenized forms of money such as bank deposits and regulated stablecoins.

The investment, terms of which were not disclosed, signals growing interest among traditional banks to lay the groundwork for blockchain-based payments that stay within the bounds of existing financial regulations.

That push includes Switzerland's UBS, PostFinance and Sygnum Bank carrying out transactions on Ethereum in a proof of concept, and interbank messaging system Swift building infrastructure for onchain settlement.

Ubyx is building technology to enable tokenized money to move between issuers and institutions through a common settlement framework. The system is designed to support the exchange and redemption of tokenized funds at par value across wallets, banks and payment platforms.

“Interoperability is essential to unlock the full potential of digital assets,” said Ryan Hayward, Barclays’ head of digital assets and strategic investments, in a statement. “As the landscape of tokens, blockchains and wallets evolves, specialist technology will play a pivotal role in delivering connectivity and infrastructure to enable regulated financial institutions to interact seamlessly.”

Early last year, Ubyx raised $10 million in a seed round led by Galaxy Ventures. VanEck, Peter Thiel’s Founders Fund and Coinbase Ventures also participated in the fundraiser.