A Lloyds Banking Group survey found that nearly three-quarters of major UK financial institutions expect tokenization to reshape financial services. Banks and asset managers increasingly explore blockchain-based infrastructure for payments, settlement and liquidity management. Lloyds, the UK's largest financial services provider, polled 100 senior decision-makers across major UK banks, insurers, asset managers and financial sponsors. The annual survey found that 60% of respondents cited faster payments and settlement as the biggest potential benefit of tokenization. The survey found that 41% of respondents identified improved collateral and liquidity management as a potential benefit. Lloyds said moving assets and payments onto digital infrastructure could free up capital and liquidity tied up in financial transactions for deployment elsewhere. Rob Hale, co-head of global markets at Lloyds, said the next phase involves turning individual use cases into infrastructure that works at scale. Hale said interoperability and common standards are needed to connect digital and traditional markets. Earlier this year, Lloyds worked with Archax and Canton Network to use tokenized deposits to purchase a tokenized UK government bond. Lloyds described the transaction as the UK's first public blockchain transaction of that kind. UK policymakers are pushing to move tokenization beyond pilot projects and into the country's financial infrastructure. The Bank of England proposed extending its core settlement infrastructure toward near-24/7 availability in May. A subsequent government payments blueprint called for tokenized and traditional forms of money to operate within an interoperable payments system. A government-backed industry task force estimated in July that leadership in tokenized finance could add as much as 33 billion British pounds ($44 billion) to annual UK economic output by 2035. The task force called for the country's first tokenized government bond by early 2027. The UK has also sought greater coordination with the US on tokenized finance. In July, the US and UK treasuries recommended creating a private-sector group to test cross-border uses of tokenized assets. The treasuries urged US financial regulators and the Bank of England to identify shared approaches to regulating tokenized assets.
Lloyds Survey Shows 73% of Major UK Institutions Expect Tokenization Shift
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Summary
A Lloyds Banking Group survey shows 73% of major UK institutions expect tokenization to reshape financial services. Nearly 60% cited faster payments and settlement as the top benefit. Lloyds noted digital infrastructure could boost liquidity and crypto markets. The UK government plans a tokenized government bond by 2027 and is working with the US on cross-border efforts. CFT remains a focus as regulators push for secure integration.
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