Lloyds and Visa settled payment obligations with stablecoins over the weekend, testing whether institutions can move money more flexibly while customers keep using familiar payment methods.
During the seven-day pilot, Lloyds used USDC, a dollar-pegged stablecoin, to settle obligations totalling $750,000 with Visa. According to its September 30 announcement, funds arrived in under an hour, including over the weekend.
Lloyds bought the USDC through Archax and booked the settlements through its Corporate Markets branch in Jersey before sending funds to Visa in the US. These were institutional transfers, so the pilot changed how the bank met its obligations to Visa without requiring customers to pay in crypto.
A card approval comes before settlement
A card approval tells a shopper that a purchase can proceed. The institutions handling that purchase still have to calculate and settle the resulting obligations, which is where a different way of transferring funds can become useful.
Consider a hypothetical $100 purchase
A shopper pays $100 with a Visa card, and the issuing bank approves the purchase. The financial institutions involved still need to settle what they owe. Where an arrangement permits it, the bank could pay its obligation to Visa in USDC while the shopper continues using the same card.
Illustrative example; the release does not describe individual purchases within the pilot.
Visa’s earlier settlement work follows the same principle: institutions can change how they exchange funds while customers continue paying by card. Our coverage of Visa’s stablecoin-backed card infrastructure examined another application of that approach.
Why settling on Sunday matters
A bank that needs to meet an obligation during the weekend may have to arrange the funding before its usual transfer channels close. Setting money aside reduces the chance of missing the payment, but also limits what the bank can use it for in the meantime.
Being able to transfer funds when the obligation falls due could reduce the need to arrange everything before the weekend. Visa’s US settlement announcement identifies seven-day availability and potential collateral reductions among the benefits. Rob Cameron, Visa’s UK and Ireland country manager, described the aim of the Lloyds pilot as giving institutions “more choice over how and when they settle funds.”
The bank still needs USDC available when settlement is due. If it buys and holds tokens well in advance, some funding remains committed to the payment; the greater benefit would come from being able to acquire them reliably closer to the time they are needed.
The transfer connected different blockchain environments
Lloyds used its own node on Canton, where privacy settings can control access to transaction information, while Visa supported settlement on a separate public blockchain. The release does not name that blockchain or explain how the two environments were connected.
Canton’s documentation describes a public permissioned network, with applications able to set their own privacy and access rules. That allows institutions to restrict visibility of sensitive information while connecting with other participants.
A bank using a similar setup would need to establish that the recipient accepts the asset on the intended network, that delivery can be confirmed and that staff can resolve a failed transfer. Those operational arrangements would help determine whether the connection is useful beyond a controlled trial.
What happens when the recipient needs bank dollars
After receiving USDC, an institution may be able to use it directly for another obligation. If it needs dollars in a bank account instead, it must also arrange conversion and a conventional transfer.
Circle explains that blockchain transfers can run outside banking hours, while converting funds and moving them through bank accounts depends on the available local payment systems. Some support transfers around the clock; others retain operating-hour restrictions.
Receiving USDC on Sunday can therefore be useful without guaranteeing that the recipient can also receive dollars in its bank account that day. The benefit depends on whether it can use the tokens directly or has access to a suitable conversion service.
The full cost will determine the commercial case
The release does not quantify how much the pilot saved in fees, reconciliation work or advance funding. Those figures would help determine whether faster delivery also improves the economics of settlement.
Any saving would have to exceed the costs of buying and converting USDC, securing it and operating the new settlement process. Using a dollar-pegged token also leaves a currency conversion to arrange whenever the bank starts or finishes with another currency.
A larger rollout would need to show that the institutions can fund and complete these transfers reliably at a competitive total cost. Customers might eventually benefit through service improvements or lower charges, but the pilot does not establish either outcome. It demonstrates that this settlement route worked with live obligations, including outside conventional banking hours.
This article is for informational purposes only and does not constitute investment advice.
Kosta has reported on cryptocurrency markets and blockchain infrastructure since 2020, bringing over six years of hands-on experience in the crypto industry built through daily tracking of markets, trends, and emerging blockchain developments. Specializing in Bitcoin on-chain analysis, institutional ETF flows, and digital asset price action, his work at Coindoo has been cited by other news agencies and consistently covers market developments with a focus on data-driven reporting across Bitcoin, Ethereum, Solana, and XRP.
Over the years, Kosta has contributed to multiple crypto media outlets in different regions, authoring over 6,000 articles across the sector. His reporting spans cryptocurrency markets and the broader fintech industry, tracking not only price action but also the technological and regulatory forces shaping the ecosystem.
To support his analysis, Kosta actively leverages on-chain data and metrics from leading platforms such as Santiment, Glassnode, and CryptoQuant, enabling deeper, evidence-based market insights. He believes in the power of transparency and the data that underpins the blockchain ecosystem.
His academic background in Marketing Management from Denmark further complements his analytical approach, adding a strong understanding of communication strategy and content positioning to his work.
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