TLDR
- 71% of UK finance leaders expect tokenization to reshape financial services, according to a Lloyds survey.
- 60% of respondents named faster payments and settlement as the biggest benefit of tokenization.
- 41% pointed to better collateral and liquidity management as a key advantage.
- Lloyds has already tested tokenized deposits with Visa, settling $750,000 in USDC payments.
- The UK government estimates tokenization could add $44 billion to the economy by 2035.
UK financial institutions are preparing for a shift toward tokenized finance, according to a new survey from Lloyds Banking Group. The bank’s tenth annual Financial Institutions Sentiment Survey polled 100 senior decision-makers across UK banks, insurers, and asset managers.
71% of UK financial institutions expect tokenization to reshape finance 🇬🇧 pic.twitter.com/4PaRs5Q2Hm
— RWA Foundation (@RWAFoundation_) October 2, 2026
The results show that 71% of respondents expect tokenization to reshape financial services over the coming years.
What the Survey Found
Faster payments and settlement topped the list of benefits, with 60% of respondents naming it as the biggest opportunity. Another 41% pointed to improved collateral and liquidity management.
Lloyds explained that tokenization involves representing assets like cash, bonds, and funds digitally on blockchain infrastructure. This can speed up transactions and automate processes once certain conditions are met.
Rob Hale, co-head of global markets at Lloyds, said the next step is turning individual projects into infrastructure that works at scale. He added that this requires common standards to connect digital and traditional markets.
The survey also found a wider jump in interest toward new technology. 77% of respondents now see investment in emerging tech as a growth priority, up from 41% in 2025.
Lloyds Has Already Tested the Technology
Lloyds has not just discussed tokenization in theory. Earlier this year, the bank worked with Archax and Canton Network on what it called the UK’s first public blockchain transaction using tokenized deposits to buy a tokenized UK government bond.
More recently, Lloyds completed a trial settling $750,000 in live payment obligations with Visa using USDC. The seven-day pilot moved funds to Visa in under an hour, even during weekends and outside normal banking hours.
The bank ran its own node on the Canton Network, while Visa settled on a separate public blockchain. This tested whether two different blockchain systems could work together without both sides using the same network.
Peter Left, Lloyds’ head of digital assets, said the live payments let the bank examine the technology’s capabilities in a real setting.
Separately, UK Finance ran interbank tests involving Lloyds, NatWest, Barclays, and HSBC. These tests included two remortgage transactions and a simulated online marketplace purchase, all using tokenized deposits.
During the mortgage tests, funds were locked until the property process finished and released automatically. No physical goods changed hands in the marketplace test, but the project reserved funds until confirmation of delivery.
Government Plans and US Cooperation
UK policymakers are also pushing this shift beyond private bank trials. In May, the Bank of England proposed extending settlement hours toward near-24/7 availability.
A government-backed task force estimated in July that UK leadership in tokenized finance could add up to $44 billion to the economy by 2035. The task force called for the UK’s first tokenized government bond by early 2027.
The same report called for an end-to-end tokenized repo transaction by spring 2027.
The UK has also sought closer ties with the United States on this issue. In August, the two countries recommended forming a private-sector group to test cross-border tokenized asset transactions for one year.
Under these plans, regulators including the SEC, CFTC, and Bank of England would examine shared approaches to settlement and market infrastructure. Officials will also study whether stablecoins and tokenized funds could count as collateral.
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